Nutanix Gains Place on The Information's Takeover Target List

The tech publication The Information placed Nutanix on its takeover-target list, saying Alphabet, HP Enterprise and Cisco might be interested.
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Nutanix  (NTNX) - Get Report shares jumped Friday after The Information, a technology publication, placed the cloud software company on its takeover-target list.

The Information didn’t cite any evidence of a strategic review or takeover talks for Nutanix, but it did say Alphabet  (GOOGL) - Get Report, Hewlett Packard Enterprise  (HPE) - Get Report and Cisco  (CSCO) - Get Report might be interested.

HPE and Cisco tried to buy Nutanix before its IPO in 2016, Seeking Alpha reported. HPE ended up buying Nutanix competitor SimpliVity in 2017.

In May, Nutanix Chief Executive Dheeraj Pandey said the coronavirus pandemic represents a time of renewal for the cloud infrastructure firm.

For its fiscal third quarter ended April 30, Nutanix reported revenue of $318.3 million, up 11% year-over-year, while its non-GAAP net loss widened to 69 cents a share.

"Every 8 to 10 years there is a massive disruption, a recession that happens, and some companies go and retool themselves," Pandey told TheStreet.

Nutanix is shifting from hardware sales to services and subscription revenues, and said that 82% of total revenue was from subscriptions last quarter. 

Its total billings were $383.5 million, up 11% year-over-year, and its non-GAAP gross margin grew to 80.7%.

In April, Goldman Sachs downgraded shares of the enterprise cloud company to sell from buy.

Goldman analysts were “driven by the ongoing free cash flow burn and high operating expenses,” they wrote in a report.

Nutanix shares recently traded at $22.79, up 12%. The stock has dropped 28% year to date, compared with a 17% rise for the Nasdaq Composite.