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Shares of Nutanix (NASDAQ: NTNX) gained 27.3% last month, according to data provided by S&P Global Market Intelligence, as two analysts weighed in with favorable coverage of the enterprise software company.
Nutanix stock benefited from favorable analyst coverage in October. Shares climbed roughly 10% on October 10 following the release of bullish notes from analysts from William Blair and Jefferies. These reports highlighted customer satisfaction and a move to a software-only business model as positive catalysts, and came on the heels of a strong earnings report in August that saw fourth-quarter sales increase 62% year over year and full-year sales increase 75% year over year.
The shift away from hardware-based storage to a cloud-only business is expected to help Nutanix improve margins, and the company has been posting strong client growth: Its customer count at the end of its fiscal year ending in July was up 87% over the prior-year period. An increase in large-size deals also points to customer satisfaction and progress in moving upmarket.
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The company is posting impressive sales growth and, if its specialized enterprise software continues to offer customers an edge over products from larger, more-resource-rich competitors, the stock could have plenty of room to run. Even after rallying roughly 75% over the last six months, the stock still trades down 25% over the last three years, and its forward-price-to-sales ratio of 3.6 looks appealing in light of the business' rapid growth.
Nutanix is expected to report first-quarter earnings in late November or early December.
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