Piper Sandler lowered the firm's price target on Nutanix to $60 from $63 and keeps an Overweight rating on the shares. The firm notes results and guide came in better than feared as many entered the quarter expecting further "death by 1,000 cuts" given the ongoing server supply chain related issues. On the positive side, the business showed term-license strength, TCV and RPO bookings were strong, VMware related migrations are continuing and representing the majority of net-new customer wins, OEM partners are contributing nicely, Nutanix is helping customers across environments that is resulting in an uptick in NC2, and the lead metrics and build does point to a fairly conservative Q4 setup. However, a decent amount of the upside this quarter came from duration-extension, the implied Q4 sales and free cash flow guide was lowered, and Piper has some concerns around the likely 2027 renewal base slowing.
