NTNX: Raymond James $71 PT

Only time will tell, but I can’t imagine NTNX stays at current levels for more than a few weeks (or more than Q1 earnings date). A sub 5 forward EV/S for a software company growing at 50% is absurd.

As always, I’ve been wrong many times, so please do your own research.



I should add, I’ve been thinking about NTNX a lot lately. Aside from valuation and HCI market set to grow at 40%+ over next few years, NTNX is building a lot of optionality. I don’t understand how analysts are viewing this as a negative, but they are building several applications/products that should significantly add to their TAM and revenue in next 12 months (Xi, DaaS with Frame acquisition, etc).

It’s what excited me about TWLO the first time I read about Flex months ago. Not only is this valuation absurd, but it has optionality to continue growing at 50% rate for years.

Again, nothing is guranteed, and Xi could be a flop, but surprising that a software company is being punished for launching new products that may significantly expand TAM and accelerate growth (starting next quarter or two). We’re talking about a product with Xi that might GA in 2-3 months.

Oh well, Mr. Market sometimes is moody…


NTNX just announced that Frame has received FedRAMP Ready designation for potential sale to the public sector. Frame will now undergo an in-depth assessment to make sure it meets government security standards. If it does, it appears Frame will receive a FedRAMP Moderate Authorization and be fully authorized for public sector use.



NTNX isn’t growing at 50%, but was growing at 40%. Nor is it forecast to do so that I can see.

JPM, for instance, has an estimated 30% growth rate from 2019-2020.

1.5 x 1.5 = 2.25.

1.3 x 1.4 = 1.82.

A healthy 23.6% difference in ending revenues in a short period of time. Massive for a growing firm, in fact.


Sorry, Najdor, you’re clearly a very smart guy, but some of your points really flabbergast me.

NTNX was growing at 40% revenue in Q3. It was growing revenue at 20% this last quarter. Sure. But you must be aware, because we’ve flogged it to death here, that subscription and services revenue is growing at 50% whilst pass-through hardware has declined to now less than 10%. S&S billings have been growing at 66% for the past two quarters.

I know you know all that. Yet you clearly disagree with the conclusions here. Which is great. Absolutely totally 100% welcomed. I’m positively frightened of echo chamber syndrome and confirmation bias. I have been catching the falling knife here in little nibbles (disciplined but still so) and have been doing my best, holding back putting my convictions into practice, loading up the shotgun and going all out on NTNX. It’s difficult but one has to be disciplined here - although Buffet said if he were to start again, he’d easily be able to find sure things to absolutely trounce the market if he wasn’t held back by his billions.

So please, give a counter-argument.

But please don’t completely ignore our arguments, quote some analysts estimates, who we all believe are incorrect, drop the mic and leave. Spouting off soundbites leads to unhealthy debate.