Nutanix Stock Soars on Impressive Growth
Today’s stock represents one of our favorite methods of investing in growth stocks. It is called venture capital investing, where we look for businesses that benefit from producing innovative products and solutions for a whole gamut of industries. The stocks of such companies continue to break new records as they continue to register above-average growth and keep on riding the key technology trend. Investors stand to make triple-digit returns from such venture capital stocks if they choose their stocks wisely.
One such stock is Nutanix Inc(NASDAQ:NTNX), which provides a leading next-generation enterprise cloud operating system, which combines private and public cloud into a single software fabric. The company is a pioneer in the concept of hyperconverged infrastructure (HCI) that has taken the enterprise technology world by storm.
Nutanix’s solutions enable companies to build and operate powerful multicloud architectures, which are becoming more ubiquitous in current times. Its enterprise cloud operating software melds private, public, and distributed cloud operating environments to provide a single point of control for companies to manage their IT infrastructure and applications at any scale.
NTNX stock jumped more than 100% on its public listing last year, on the back of huge expectations and optimism surrounding this technology. Nutanix is a strong player in enterprise cloud computing and its HCI solutions help companies simplify their data center operations besides bringing about huge cost savings.
With customers like Toyota Motor North America, Inc., Trek Bicycle Corporation, Best Buy Co Inc (NYSE:BBY), eBay Inc (NASDAQ:EBAY), and many other well-known names in the financial service and healthcare industries besides the federal government, Nutanix has carved a name for itself in the field.
The company is a pioneer of the HCI concept, which is being looked at as the next big thing by other big names in the enterprise technology space. With the high growth expected in this sector, Nutanix stock has a lot of room to grow in the coming years.
According to the “Worldwide Quarterly Converged Systems Tracker” by International Data Corporation (IDC), the worldwide converged systems market revenues increased 4.6% year-over-year to $2.67 billion during the first quarter of 2017. Moreover, research director Eric Sheppard said that these systems have become a significant source of innovation and growth for the data center infrastructure market. (Source: “,” IDC, June 22, 2017.)
Nutanix is leading in this emerging technology space. Its initial public offering (IPO) last year brought hyperconvergence into the limelight and forced other players to rethink their strategies. The HCI trend enables companies to combine storage and computing in different systems on a single device powered by software. The company’s high growth rate and a large customer base are proof of the popularity of its HCI solutions.
The company recently announced first-quarter fiscal 2018 financial results. Revenue came in at $275.6 million, an increase of 46% year-over-year. Billings were at $315.3 million, representing growth of 32% year-over-year. (Source: “Nutanix Reports First Quarter Fiscal 2018 Financial Results,” Nutanix Inc, November 30, 2017.)
The strong growth was driven by the Federal sales and large deals as the company announced its shift toward a software-centric business model. Nutanix dealt with hardware sales as well earlier.
Nutanix ended the first quarter with 7,813 end-customers, adding over 760 new end-customers, and increased the number of $1.0-million+ deals with 49 customers signing deals over $1.0 million in the quarter, an increase of 36% year-over-year.
The markets liked the high growth and move toward a software-centric approach, which sent NTNX stock soaring by almost 10%. The stock is gradually approaching its highs recorded during its IPO, as can be seen from the stock chart below. Over the last year, Nutanix stock has gained more than 25%.
Chart courtesy of StockCharts.com
Hyperconvergence may have recently emerged as a popular term, but it holds immense potential as the concept of software-defined data centers gains strength in the coming years. For customers, it means doing business much more efficiently, as compared to previous data center technologies.
“Nutanix Enterprise Cloud OS” delivers the simplicity and agility of popular public cloud services like “Amazon Web Services” (AWS) by Amazon.com, Inc. (NASDAQ: AMZN), together with the security and control that it needs in a private cloud.
Although Nutanix operates in a very competitive enterprise infrastructure market, its continuous growth is proof enough that its innovative solutions and service are in great demand by its customers. It has an impressive presence in a growing market and is a leader in the HCI space. The recent results and the guidelines point toward better business performance in the coming quarters.
The company’s software runs across different cloud environments—whether public, private, or distributed—and make its customers’ businesses run more efficiently. As Nutanix evolves from an appliance company to a predominantly software firm, NTNX stock shall continue riding higher. Investors may not want to miss this opportunity.