Nutanix (NTNX) AI Stock Analysis

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Nutanix

(NASDAQ:NTNX)

Rating:76Outperform

Price Target:

$93.00

▲( 16.25% Upside)

Nutanix's strong financial performance, particularly in revenue and cash flow growth, along with positive earnings call results, drive a solid stock score. However, profitability challenges, financial instability, and a concerning valuation limit the upside potential. The stock's technical strength indicates positive market sentiment, though caution is advised due to overbought conditions.

Positive Factors

Competitive Position

Nutanix plays in an enviable market position that is largely a duopoly with VMware, a competitor that has raised prices and damaged its goodwill following its acquisition by Broadcom.

Financial Performance

Nutanix Inc delivered results better than expected with new logo growth exceeding 50%, adding 710 new customers.

Strategic Partnerships

Nutanix announced that its standalone Acropolis Hypervisor (AHV) will begin to support Pure Storage’s FlashArray product family, highlighting a strategic partnership driven by customer requests.

Negative Factors

Market Uncertainty

Nutanix's market dynamics have changed, reflecting increased uncertainty regarding IT spending as a result of the introduction of tariffs that potentially stress customers' budgets.

Potential Cost Increases

The risk from tariffs presents greater challenges for Nutanix than what was expected with its prior quarterly report.

Tariffs and Costs

Tariffs could add costs to the overall solution due to higher server prices, impacting purchases.

Nutanix (NTNX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$22.15B

Dividend YieldN/A

Average Volume (3M)2.53M

Price to Earnings (P/E)―

Beta (1Y)1.47

Revenue Growth14.82%

EPS Growth14.06%

CountryUS

Employees7,150

SectorTechnology

Sector Strength76

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.56

Shares Outstanding266,662,480

10 Day Avg. Volume2,761,172

30 Day Avg. Volume2,528,145

Financial Highlights & Ratios

PEG Ratio-14.44

Price to Book (P/B)-23.99

Price to Sales (P/S)0.00

P/FCF Ratio30.15

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$91.25

Price Target Upside14.06% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

Nutanix Business Overview & Revenue Model

Company DescriptionNutanix, Inc. is a cloud computing company that specializes in enterprise cloud platforms. Founded in 2009 and headquartered in San Jose, California, Nutanix offers software solutions that simplify the management of multi-cloud environments and hyper-converged infrastructure (HCI). Its core product is the Nutanix Cloud Platform, which integrates computing, virtualization, storage, networking, and security to streamline IT operations for businesses across various sectors, including healthcare, finance, and government.

How the Company Makes MoneyNutanix makes money primarily through the sale of its software products and solutions, which are delivered via a subscription-based model. The company's key revenue streams include software licenses, support services, and professional services. Nutanix's software licenses are often bundled with hardware through partnerships with original equipment manufacturers (OEMs), such as Dell Technologies, Lenovo, and Hewlett Packard Enterprise. Additionally, Nutanix generates revenue from its cloud services offerings, which provide customers with hybrid and multi-cloud capabilities. The company's transition to a subscription-based model has been a significant factor contributing to its earnings growth, allowing for more predictable and recurring revenue streams.

Nutanix Key Performance Indicators (KPIs)

Any

Annual Recurring Revenue

Annual Recurring Revenue
Measures the predictable revenue generated from ongoing subscriptions or contracts, indicating business stability and customer retention strength.

Chart InsightsNutanix's Annual Recurring Revenue (ARR) has shown consistent growth, reaching $2.06 billion, a 19% year-over-year increase. This momentum is attributed to strong customer acquisition and leverage from OEM and channel partners. Despite challenges like elongated sales cycles and federal market uncertainty, Nutanix's strategic investments in sales, marketing, and R&D are paying off. The company has raised its full-year guidance, reflecting confidence in its Cloud Platform's strength and market opportunities, while maintaining robust financial flexibility and cash flow.

Data provided by:

Main Street Data

Nutanix Financial Statement Overview

Summary

Nutanix exhibits strong revenue growth and cash flow generation, which are positive indicators for future performance. However, the company faces challenges with profitability and financial stability, primarily due to high debt levels and negative equity. Continued focus on improving operational efficiency and addressing leverage will be crucial for improving financial health.

Income Statement

Positive

Nutanix has shown strong revenue growth with a TTM increase of 7.88% compared to the previous annual period. The gross profit margin remains robust at 85.82%, reflecting efficient cost management. However, the net profit margin is negative at -2.39% in the TTM, indicating ongoing profitability challenges. EBIT and EBITDA margins have improved, but they still suggest the need for further operational efficiencies.

Balance Sheet

Neutral

The company has a high debt-to-equity ratio due to negative stockholders' equity, which poses a financial risk. Return on equity is not meaningful due to negative equity. The equity ratio is also negative, highlighting financial instability. However, cash reserves are healthy, providing some liquidity buffer.

Cash Flow

Positive

Nutanix has demonstrated impressive free cash flow growth of 7.34% in the TTM. The operating cash flow to net income ratio is strong, indicating good cash generation relative to net income. The company is effectively converting earnings into cash, supporting its operational needs.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
2.32B	2.15B	1.86B	1.58B	1.39B	1.31B
	Gross Profit
1.99B	1.82B	1.53B	1.26B	1.10B	1.02B
	EBIT
68.91M	7.56M	-207.15M	-457.44M	-660.78M	-828.92M
	EBITDA
184.47M	172.72M	-57.73M	-594.09M	-806.71M	-730.14M
	Net Income Common Stockholders
-55.36M	-124.78M	-254.56M	-797.54M	-1.03B	-872.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.74B	994.34M	1.44B	1.32B	1.21B	719.78M
	Total Assets
2.99B	2.14B	2.53B	2.37B	2.28B	1.77B
	Total Debt
1.46B	684.60M	1.32B	1.43B	1.18B	643.59M
	Net Debt
384.87M	29.32M	803.74M	1.03B	899.24M	324.85M
	Total Liabilities
3.80B	2.87B	3.23B	3.16B	3.29B	2.04B
	Stockholders Equity
-807.67M	-728.15M	-707.42M	-790.17M	-1.01B	-274.98M
Cash Flow		Free Cash Flow
641.57M	597.68M	207.00M	18.48M	-158.46M	-249.37M
	Operating Cash Flow
724.47M	672.93M	272.40M	67.54M	-99.81M	-159.88M
	Investing Cash Flow
221.45M	529.59M	-49.78M	-54.19M	-597.15M	24.56M
	Financing Cash Flow
-554.80M	-1.06B	-112.71M	103.64M	663.85M	57.80M

Nutanix Technical Analysis

Technical Analysis Sentiment

Positive

Last Price80.00

Price Trends

50DMA

69.90

Positive

100DMA

68.95

Positive

200DMA

65.39

Positive

Market Momentum

MACD

4.07

Negative

RSI

63.95

Neutral

STOCH

80.72

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTNX, the sentiment is Positive. The current price of 80 is above the 20-day moving average (MA) of 74.92, above the 50-day MA of 69.90, and above the 200-day MA of 65.39, indicating a bullish trend. The MACD of 4.07 indicates Negative momentum. The RSI at 63.95 is Neutral, neither overbought nor oversold. The STOCH value of 80.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTNX.

Nutanix Risk Analysis

Nutanix disclosed 62 risk factors in its most recent earnings report. Nutanix reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 2 New Risks

Our revolving credit facility contains a financial covenant and other covenants that may restrict our actions, and a failure to comply with these covenants could have a material adverse effect on our financial condition. Q4, 2024

Servicing and repaying our debt, including the 2027 Notes and 2029 Notes and any borrowings under the Credit Agreement, may require a significant amount of cash, and we may not have sufficient cash to pay our indebtedness. Q4, 2024

Nutanix Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTNX	76 Outperform	$22.15B	―	6.85%	―	14.82%	14.06%
ZS	74 Outperform	$39.08B	―	-1.21%	―	27.77%	89.39%
IOT	73 Outperform	$26.93B	―	-15.61%	―	33.26%	47.73%
CYBR	72 Outperform	$17.28B	1,777.39	-5.36%	―	35.12%	-191.84%
NET	72 Outperform	$54.60B	―	-7.35%	―	27.79%	56.19%
OKTA	61 Neutral	$21.96B	2,082.94	0.46%	―	15.33%	―
Sector *	60 Neutral	$11.56B	10.24	-7.04%	2.94%	7.46%	-10.54%

* Technology Sector Average

Performance Comparison

NTNX

Nutanix

80.00

8.14

11.33%

CYBR

CyberArk Software

354.07

109.55

44.80%

OKTA

Okta

122.06

21.19

21.01%

Zscaler

248.72

74.56

42.81%

NET

Cloudflare

156.52

81.54

108.75%

IOT

Samsara

45.65

5.19

12.83%

Nutanix Earnings Call Summary

Earnings Call Date:Feb 26, 2025

(Q2-2025)

% Change Since: 15.36%|

Next Earnings Date:May 28, 2025

Earnings Call Sentiment Positive

Nutanix reported strong financial performance, exceeding guidance and achieving significant growth in new logos and ARR. The company improved its financial flexibility and raised its full-year guidance. Despite these positives, challenges remain with elongated sales cycles and variability in larger deals, alongside uncertainty in the federal market. Overall, the highlights significantly outweigh the lowlights.

Q2-2025 Updates

Positive Updates

Exceeded Guidance and Revenue Growth

Nutanix reported record quarterly revenue of $655 million, surpassing the guided range and representing a year-over-year growth rate of 16%. ARR grew 19% year-over-year to $2.06 billion.

Strong New Logo Growth

Nutanix achieved year-over-year new logo growth exceeding 50% for the second consecutive quarter, with strength across all customer segments, including the Global 2000.

Improved Financial Flexibility

Nutanix strengthened its balance sheet by issuing convertible notes at attractive terms and establishing a $500 million revolving credit facility.

Positive Free Cash Flow

The company delivered strong free cash flow of $187 million, with a free cash flow margin of 29%.

Increased Full Year Guidance

Nutanix raised its full year revenue guidance to $2.495 billion to $2.515 billion, representing approximately 17% year-over-year growth at the midpoint.

Negative Updates

Elongated Sales Cycles

The company continues to see modestly elongated average sales cycles compared to historical levels, attributed to the current macroeconomic environment.

Challenges with Larger Deals

There is more variability in timing, outcome, and deal structure with larger deals, although more of these closed in Q2.

Federal Market Uncertainty

Though federal business improved in Q2, uncertainty remains due to potential impacts from actions by the new U.S. administration.

Company Guidance

During the Nutanix Second Quarter 2025 Earnings Conference Call, the company reported financial results that surpassed its guidance across all metrics. The annual recurring revenue (ARR) grew 19% year-over-year, reaching $2.06 billion, while quarterly revenue hit a record $655 million, exceeding the guided range of $635 million to $645 million and marking a 16% year-over-year increase. Nutanix also achieved a non-GAAP operating margin of 24.6%, outperforming its guidance of 20% to 21%, and reported a non-GAAP net income of $165 million, equivalent to $0.56 per share. Free cash flow was robust at $187 million, representing a 29% margin. The company raised its full fiscal year 2025 guidance, projecting revenue between $2.495 billion and $2.515 billion, a non-GAAP operating margin of 17.5% to 18.5%, and free cash flow of $650 million to $700 million. Nutanix attributed its performance to the strength of its Cloud Platform, successful customer acquisition, and increased leverage from OEM and channel partners, while also noting an ongoing focus on investment in sales, marketing, and R&D to capitalize on market opportunities.

Nutanix Corporate Events

Executive/Board Changes

Nutanix Appoints Eric Brandt to Board of Directors

Neutral

May 16, 2025

On May 15, 2025, Nutanix appointed Eric K. Brandt to its board of directors, bringing his extensive leadership and finance experience to the company. Brandt’s appointment is expected to support Nutanix’s focus on sustainable and profitable growth. Concurrently, David Humphrey resigned from the board, having joined as part of Bain Capital’s investment in 2020. His departure is not due to any disagreements, and Bain Capital remains a significant stakeholder, with Max de Groen continuing on the board.

The most recent analyst rating on (NTNX) stock is a Buy with a $76.00 price target. To see the full list of analyst forecasts on Nutanix stock, see the NTNX Stock Forecast page.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.