Shares of Nutanix (NASDAQ:NTNX) fell 10.6% today after Morgan Stanley analyst Katy Huberty downgraded the cloud-computing software specialist from overweight to equal weight. Huberty also reduced her firm's per-share price target on Nutanix stock from $53 to $37 -- which, to be fair, still represented a roughly 5% premium from last Friday's close.
To justify her relative bearishness, Huberty said she is worried that disappointing results from Nutanix's storage peers so far this earnings season may be indicative of a broader market slowdown. She also noted the company is facing increasing competition from companies like Dell Technologies.
"We remain positive on Nutanix's technology portfolio, but now think a turnaround will take longer than the two to three quarters assumed by investors," Huberty added.
We should receive more color to that end when Nutanix releases fiscal third-quarter 2019 results this Thursday, May 30, after the market close. But given this note of caution, and with shares still reeling from a massive post-earnings drop in March after Nutanix's sales guidance for the quarter fell far short of investors' expectations, it's no surprise to see the stock falling in response today.