Has Nutanix Done the Right Thing by Switching Its Business Model?
Nutanix (NASDAQ: NTNX) stock got a big shot in the arm after its first-quarter results turned out to be much better than Wall Street's expectations. But this wasn't the only reason investors were overjoyed. The hyper-converged cloud infrastructure vendor announced that it is pivoting to a software-only business model, and will gradually eliminate hardware sales.
Analysts have been expecting Nutanix to make the business model switch, and the confirmation arrived with the latest quarterly report. The company plans to reduce hardware-related sales to just 8%-9% of the total by the fourth quarter of the fiscal year, down from its 25% at present.
Now, this move might cause some short-term discomfort, but investors don't seem to be worried given the potential for long-term gains. Let's take a look at how this pivot should boost Nutanix's performance.
Source: Fool.com
Nutanix Inc. Stock
The stock is an absolute favorite of our community with 32 Buy predictions and no Sell predictions.
At the moment Nutanix Inc. has reached the predicted target price of 62 €, with a current price of 61.84 €.
