Nutanix shares soared on Friday after the cloud computing company raised its full-year outlook in response to solid demand for its services.
Nutanix (ticker: NTNX) said after the market closed Thursday that it expects full-year revenue between $2.09 billion and $2.12 billion, compared with forecasts of $1.84 billion to $1.85 billion. The consensus call on Wall Street was $2.07 billion, according to FactSet.
The company also reported fourth-quarter earnings of 24 cents per share on revenue of $494.2 million. Analysts polled by FactSet expected profit of 16 cents per share on revenue of $475.2 million. Free cash flow was $45.4 million, while Wall Street expected a loss of $24.6 million.
“Our consistent execution throughout the year against an uncertain macroeconomic backdrop is a testament to the benefits of our subscription model,” Chief Executive Officer Rajiv Ramaswami said in the earnings report.
RBC Capital Markets analyst Matthew Hedberg raised his price target on Nutanix to $43 from $38 and maintained his outperform rating on the stock.
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Nutanix shares rose 14% on Friday According to Dow Jones Market Data, the price was $35.32, on track for its highest close since November 2021. The stock has gained 36% this year.
“Execution was once again impressive, with results highlighted by outperformance in ACV [annual contract value] “Billings/sales and strong FCF despite a challenging, albeit consistent, macro,” Hedberg said in a research note.
KeyBanc Capital Markets analyst Thomas Blakey also raised his price target to $45 from $35 and maintained his “Overweight” rating on the stock.
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“Nutanix experienced strong contract renewals in the fourth quarter of 2023, which continued to expand margins, and the company signed several larger, multimillion-dollar contracts during the quarter, despite relatively weak macroeconomic conditions highlighting Nutanix’s value proposition
“Our view is that there are no offers,” Blakey wrote in a research note.
Write to Angela Palumbo at [email protected]