Nutanix Shares Soar on Results, Private-Equity Investment, CEO Retirement

In the fiscal 2020 fourth quarter ended July 31, Nutanix revenue climbed 9% to $327.9 million from $299.9 million in the year-earlier period.
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Nutanix  (NTNX) - Get Report shares rocketed higher Friday, as the cloud-computing company reported stronger-than-expected results, a private-equity investment and the retirement of its CEO Dheeraj Pandey.

The stock recently traded at $28.11, up almost 30%, but has slumped 20% so far this year, even after Friday’s surge.

For the company's fiscal 2020 fourth quarter, ended July 31, revenue climbed 9% to $327.9 million from $299.9 million in the year-earlier period. The FactSet analyst consensus forecast $320 million for the latest quarter.

Nutanix posted a net loss of $185.3 million, or 93 cents a share, in the latest quarter, narrowing from a loss of $194.3 million, or $1.04 a share, in the year-ago quarter.

The company registered an adjusted loss of 39 cents a share, shrinking from a loss of 57 cents in the year-earlier quarter. Analysts estimated a loss of 67 cents for the latest quarter.

Meanwhile, Bain Capital Private Equity has agreed to invest $750 million in Nutanix in the form of convertible notes that will initially convert at a price of $27.75 per share, Nutanix said. That money will help fund the company’s growth, it said.

It also announced that Pandey, a co-founder of the company, will retire upon the naming of a successor.

Not everyone went gaga over Nutanix Friday. “We think investors (ourselves included) will likely need to further digest increased uncertainty over yet another model transition/pivot at Nutanix, coupled with an announced CEO succession,” Wells Fargo analyst Aaron Rakers wrote in a commentary reported by MarketWatch.

He rates the stock equal weight with a $27 price target.