Market Overview:
Nutanix is a leader in the hyper-converged infrastructure market competing with VMWare. Since its IPO in 2016, Nutanix has transformed its business from a hardware to a subscription software company. Nutanix has upgraded the quality of its revenue with subscription revenue to 77% of revenue (from 29% in FY18) at 81% GM (from 68% in FY18). Meanwhile, the trading multiple of the company is near multi-year lows at 2.1x sales. With an improvement in execution, there is opportunity for Nutanix to rerate at a multiple more commiserate of a successful SaaS company (6-10x)