Analysts: Buy the FAANG-Induced Dip on This Stock

Piper Jaffray called Monday's sell-off "excessive"

Sep 18, 2018 at 11:31 AM
facebook X logo linkedin


The shares of Nutanix Inc (NASDAQ:NTNX) plunged 11.6% yesterday on reports Alphabet's (GOOGL) Google Cloud services could soon be available to private data centers. However, NTNX stock is trading up 7.1% today at $49.71, after a pair of analysts called the reaction overdone and suggested the sell-off created an attractive entry point on the tech shares.

In a note entitled, "Unfounded Media Rumors Create Buying Opportunity," Needham reiterated its "buy" rating and $71 NTNX price target -- a 43% premium to current trading levels -- and made note of a previously announced partnership between Nutanix and Google. The analyst also suggested traders should buy the dip on the "stock price dislocation."

Echoing this, Piper Jaffray said it thinks "most enterprises will choose to leverage a multi-cloud infrastructure and would not want to be locked into single cloud provider," and that "the selling pressure attributed to this report is excessive." The brokerage firm underscored its "overweight" rating and $66 price target on NTNX stock.

More broadly, most analysts are upbeat toward Nutanix, with 13 maintaining "buy" or better ratings, compared to four "holds," and one "strong sell." Plus, the average 12-month price target of $62.95 represents expected upside of 26% to NTNX stock's current price.

This optimism has been echoed in the options pits, as well. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 8.54 ranks in the 72nd annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Looking at the charts, it's not too hard to see why Wall Street is upbeat toward NTNX. Year-over-year, the cloud stock has more than doubled, and is up 40% in 2018. And while the shares have been choppy in recent months, they've consistently found a foothold in the $46-$48 neighborhood -- with the latter currently home to their 200-day moving average -- which helped contain yesterday's sell-off.

ntnx stock daily chart on sept 18

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI