Shares of cloud-based computing software company Nutanix (NTNX) - Get Report jumped nearly 20% on Tuesday after the company received a post-earnings, price-target upgrade from analysts at Wells Fargo on what they expect to be continued strong growth of its annual contract revenue.

Shares of the San Jose-based company surged 18.56%, or $5.34 a share, at $34.09 after Wells Fargo analyst Aaron Rakers raised his one-year price target to $38 from $25 following what he would consider "positive" fiscal first-quarter results.

In a note to clients, Rakers cited positive revenue from the company's backlogged pipeline as well as strong customer expansion and annual contract value expansion as key reasons for lifting his price target, though he kept his market perform rating on the shares as the company continues to transition itself to more subscriptions.

Nutanix on Monday posted a narrower-than-expected fiscal first-quarter loss amid an uptick in its software and support services and corresponding annual subscription-based billings. 

The company on Monday posted a net loss of $135.3 million, or 71 cents a share, vs. a loss of $23.7 million, or 13 cents a share, in the comparable year-ago quarter. The non-GAAP loss in the quarter was $135.3 million, compared with a non-GAAP net loss of $23.7 million in the first quarter of fiscal 2019.

Revenue came in at $314.8 million, up from $313.3 million in the first quarter of fiscal 2019, "reflecting revenue compression from the company's ongoing transition to subscription and the significant reduction of hardware revenue from the prior year," Nutanix said.