The Fat-Pitch Approach to Nutanix, Inc. (NTNX) Investing

On December 03, 2019, Nutanix, Inc. (NASDAQ:NTNX) shares gained 0.72% or 0.26 points to close at $36.15 with a thin trading volume of 3.62 million shares. It opened the trading session at $34.85, the shares rose to $36.6 and dropped to $34.64, the range by which the price of stock traded the whole day. The company now has a market cap of $6.5 billion and currently has 179.9 million outstanding shares. Nutanix, Inc. (NTNX) stock has accumulated 25 percent of market value in 21 trading days.

NTNX stock’s trailing 3-year beta is 0, meaning there will be a lower rate of return, although posing a lower risk. The part of a firm’s profit given to each outstanding share of regular stock was -$4.08 share in the trailing 52 weeks. The stock’s value fallen -13.08 percent year to date (YTD) compared to a decline of -19.15 percent in 52 week’s period. The firm’s shares are still trading -33.89 percent below its 1-year high of $54.68 and 103.78 percent up from 52-week low of $17.74. The average consensus ranking on the company is 2.2, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Nutanix, Inc. (NTNX) is most likely going to rise 9.43 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $52-month high price target. This represents a whopping 43.85 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $39, which means a return possibility of 7.88 percent in comparison with the closing price of the stock of $36.15 on December 03. The lowest price set for the stock is $20 — just above -44.67 percent from NTNX share price now.

Past records have indicated that shares in Nutanix, Inc. declined on 7 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings.

Let’s take a glimpse at some insider activity at Nutanix, Inc. (NASDAQ:NTNX) and observe the pattern. The earliest insider trade happened on 11/29/2019. Pandey Dheeraj parted with a total of 115.29 thousand shares of the firm at average share price of $36.07. The total amount for the sale was set at $4.16 million. On completing this exchange, the CEO and Chairman account balance was 143.76 thousand shares. The stock lost -0.5 percent from that insider sale. On 09/16/2019, Williams Duston, CFO, did a sale of 19.61 thousand shares at a price of $26.71 per share. This got rid of 523.78 thousand shares from the insider’s fortune and the stock experienced a 34.37 percent rally in price since the news became public. This exchange saw 218.6 thousand shares get out from the CFO account.

On 09/16/2019, Chief Legal Officer Wall Tyler recorded a sale transaction valued at $253.45 thousand. The sale at $26.71 a share has eliminated 9.49 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed 34.37 percent increase since the transaction reporting date. The company insider is left with 21.01 thousand shares remaining in the account. Pandey Dheeraj, who works as CEO and Chairman at the company, performed a sale of 9.49 thousand shares in a transaction worth $253.45 thousand. The disposal recorded on 09/16/2019 was priced at $26.71 per share. The stock price soared 34.37 percent since the transaction. Pandey Dheeraj currently holds a stake of 259.05 thousand in NTNX stock which is worth $9.36 million after the insider selling.

The stock is lingering around the initial support level of $34.99. After this, the following support is at the zone of $33.84. Up until the time the NTNX stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 72.15 on the daily chart, and this may be a cause for concern. In case the price goes below $33.84 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $36.95 level may cause a pull-back move approaching $37.76 mark.

The industry NTNX deals with has an average P/E of 30. Its P/B ratio is standing at 109.3X compared to the 9.5 industry average. It is additionally sporting a 5.4 on the Price-to-Sales ratio, compared to the industry’s P/S average of 7.5. Nutanix, Inc. has a 75.6% gross profit margin, with its operating margin around -40%. Alongside this, the company’s net profit margin currently stands at -41.5%.