Nutanix (NTNX) reported a fiscal Q3 beat but issued a softer-than-expected Q4 outlook, suggesting supply chain issues and macroeconomic pressures, Morgan Stanley said in a note Thursday.

The company set Q4 revenue guidance of $725 million to $745 million, which came in slightly below expectations at the midpoint, Morgan Stanley said. Nutanix also guided for a non-GAAP operating margin of 21% to 23%, lower than Street estimates after its Q3 margin beat.

Management said ongoing server hardware shortages, higher hardware costs, and longer delivery times continue to impact the business. The company also expects weaker new business activity in the Middle East, which represents about 5% of its exposure, the firm added.

Morgan Stanley said callback commentary reinforced that supply issues vary by vendor and product configuration, with delivery times ranging from a few weeks to six months. Mission-critical workloads have remained more resilient than less urgent deployments.

"Over the long term, with an expanding solution platform Nutanix has an attractive opportunity to sustain double-digit growth for several years into the future," the bank said, adding that for now, it remains equal-weight until factors affecting revenue timing and visibility become clearer.

Morgan Stanley raised its price target on Nutanix from $53 to $55.

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