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Nebius Group (NBIS)
NASDAQ:NBIS
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Nebius Group
(NASDAQ:NBIS)
49Neutral
Positive Factors
Customer Base
Analyst recommends Nebius Group as a favorable Neocloud play due to its diverse customer base and lower customer concentration risk compared to competitors.
Revenue Growth
There is an expected increase in revenue, hitting a $750 million revenue run rate from data centers, with new data centers expected to have high demand and margins.
Valuation
Nebius Group's valuation is considered undervalued, with a conservative sum-of-the-parts valuation suggesting a $12 billion enterprise value.
Negative Factors
Data Center Capacity
Current data center capacity is the biggest issue for Nebius Group, which could impact their ability to meet demand.
Fourth Quarter Results
The fourth quarter results were lower than expected after NBIS experienced a slower rate of customers signing up in the last month of the year.
Market Environment
The market is currently in a risk-off environment where growth names such as NBIS are most prone to experiencing selling pressure.
Nebius Group (NBIS) vs. S&P 500 (SPY)
Market Cap
$5.52B
Dividend YieldN/A
Average Volume (3M)13.67M
Price to Earnings (P/E)189.8
Beta (1Y)1.02
Revenue Growth-98.74%
EPS Growth-128.03%
CountryUS
Employees1,303
SectorCommunication Services
Sector Strength98
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.19
Shares Outstanding199,755,740
10 Day Avg. Volume15,820,408
30 Day Avg. Volume13,672,449
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.05
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$60.00Price Target Upside155.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Nebius Group Business Overview & Revenue Model
Company DescriptionNebius Group (NBIS) is a technology company specializing in cloud computing and digital infrastructure services. It provides a range of products and services including cloud storage, data analytics, and machine learning solutions to businesses across various sectors. The company is committed to enabling digital transformation by offering scalable and secure cloud solutions tailored to meet the specific needs of its clients.
How the Company Makes MoneyNebius Group generates revenue through a subscription-based model for its cloud computing services, where clients pay for using its cloud infrastructure and services on a recurring basis. Key revenue streams include fees for data storage, processing power, and additional services such as analytics and machine learning tools. The company also partners with other technology firms to enhance its offerings and expand its market reach, which contributes to its financial performance.
Nebius Group Financial Statement Overview
Summary
Nebius Group faces significant financial challenges, with declining revenues and profitability, incomplete balance sheet data, and weak cash flow management. While there were periods of strong revenue growth and profitability, the recent downturn raises concerns about the company's financial health and sustainability.Income Statement
The company has experienced significant volatility in its financial performance. The revenue has drastically declined from 2023 to 2024, leading to a negative EBIT and EBITDA. The net income has also turned negative, indicating financial distress. However, the gross profit margin remains relatively strong, suggesting some operational efficiency.40
Negative
Balance Sheet
The balance sheet data for 2024 is incomplete, making it challenging to assess current financial stability. Historically, the company had a reasonable debt-to-equity ratio and a healthy equity base. However, the increase in net debt in previous years suggests rising leverage, which could pose risks if profitability continues to decline.50
Neutral
Cash Flow
The cash flow statement highlights concerns, especially with zero operating cash flow and free cash flow in 2024. Previously, the company had positive operating cash flows, but current data suggests cash management issues. The absence of capital expenditure figures further complicates the analysis.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 117.50M | 9.04B | 7.00B | 4.78B | 2.93B | Gross Profit |
| 44.10M | 4.97B | 3.87B | 2.44B | 1.78B | EBIT |
| -443.50M | 321.56M | 177.66M | ― | 210.62M | EBITDA |
| -129.65M | 1.32B | 1.72B | 512.37M | 930.84M | Net Income Common Stockholders |
| -644.80M | 224.49M | 529.73M | ― | 332.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| ― | 1.16B | 1.13B | 1.44B | 3.20B | Total Assets |
| ― | 8.89B | 8.28B | 6.91B | 6.93B | Total Debt |
| ― | 2.36B | 1.39B | 1.89B | 1.46B | Net Debt |
| ― | 1.27B | 276.58M | 824.50M | ― | Total Liabilities |
| ― | 5.54B | 3.74B | 3.25B | 2.25B | Stockholders Equity |
| ― | 3.35B | 4.25B | 3.46B | 4.37B |
| Cash Flow | Free Cash Flow | |||
| 0.00 | ― | ― | ― | 108.23M | Operating Cash Flow |
| 0.00 | 794.06M | 559.57M | 124.62M | 438.20M | Investing Cash Flow |
| 0.00 | -1.20B | ― | 294.94M | ― | Financing Cash Flow |
| 0.00 | 472.75M | ― | ― | 1.88B |
Nebius Group Technical Analysis
Negative
23.46
Price Trends
30.68
Negative
30.05
Negative
24.60
Negative
Market Momentum
-2.66
Positive
39.59
Neutral
11.59
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NBIS, the sentiment is Negative. The current price of 23.46 is below the 20-day moving average (MA) of 24.41, below the 50-day MA of 30.68, and below the 200-day MA of 24.60, indicating a bearish trend. The MACD of -2.66 indicates Positive momentum. The RSI at 39.59 is Neutral, neither overbought nor oversold. The STOCH value of 11.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NBIS.
Nebius Group Risk Analysis
Nebius Group disclosed 53 risk factors in its most recent earnings report. Nebius Group 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 0 New Risks
Nebius Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $2.32B | 18.68 | 17.79% | ― | 5.61% | 37.61% | |
78 Outperform | $773.78M | 24.88 | 29.75% | ― | 73.72% | ― | |
78 Outperform | $2.53B | 15.73 | 8.64% | 5.62% | 20.42% | -53.10% | |
58 Neutral | $27.01B | 3.11 | -10.53% | 4.44% | 2.30% | -43.13% | |
58 Neutral | $2.85B | ― | -9.29% | ― | -12.78% | -343.35% | |
49 Neutral | $5.52B | 189.78 | -9.36% | ― | -98.74% | -128.03% |
* Communication Services Sector Average
Performance Comparison
NBIS
Nebius Group
21.04
2.10
11.09%
YELP
Yelp
34.25
-5.86
-14.61%
EVER
EverQuote
21.15
1.79
9.25%
OPRA
Opera
14.93
-0.74
-4.72%
IAC
IAC/InteractiveCorp.
34.32
-6.52
-15.96%
Nebius Group Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -47.67% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
Nebius demonstrated significant growth and strategic advancements by going public, expanding its data center and GPU capacity, and achieving strong revenue projections. Despite facing challenges with longer deal lead times, customer churn, and pricing pressure, the company remains optimistic about achieving its ambitious revenue targets and further expansion in 2025.Highlights
Successful Public Offering and Capital Raise
Nebius became the first publicly traded AI specialized cloud company in October 2024 and raised $700 million in capital in an oversubscribed offering in December, involving notable investors like NVIDIA, Accel, and Orbis.
Data Center and GPU Deployment Expansion
The company expanded its data center footprint and GPU deployments in Europe and the US, with a projected capacity of 100 megawatts by the end of 2025, scalable to over 300 megawatts.
Strong Revenue Growth and Future Projections
Projected March 2025 annualized run rate revenue is expected to be at least $220 million, with a December 2025 run rate revenue estimate of $750 million to $1 billion.
Strategic Partnerships and Business Unit Successes
Avride signed contracts with Uber and Grubhub, and Toloka's revenue grew by 140% year-over-year. TripleTen doubled new student additions, maintaining its position as a leading IT bootcamp in the US.
Lowlights
Longer Lead Times for Deals
There were timing issues with customer deals in Q4 2024, as lead times became longer due to more selective customers and in-depth proof-of-concept testing.
Customer Churn and Revenue Timing Issues
The company experienced customer churn and revenue timing issues in Q4 2024, with some large customers completing their engagements without immediate replacements.
Pressure on H100 Pricing
The company faced price pressure on H100 GPUs in Q4 2024, partly expected due to the launch of H200s.
Company Guidance
During Nebius Group's fourth quarter and full year 2024 earnings call, CEO Arkady Volozh presented an optimistic outlook for 2025, emphasizing robust growth metrics and strategic initiatives. The company resumed public trading in October and secured $700 million in capital through an oversubscribed offering. They ended 2024 with $2.4 billion in cash, including the recent capital raise. In Q4 alone, Nebius launched a new AI cloud platform, migrated customers, and debuted their Inference-as-a-Service platform, AI Studio. Their March annualized run rate revenue is projected at a minimum of $220 million, with expectations to reach $750 million to $1 billion by December 2025. Strategic focus areas include expanding data center capacity in the US and Europe, leveraging next-generation GPU technology, and building out sales and marketing teams, particularly in the US. The company also highlighted notable achievements in its business units, including Avride's partnerships with Uber and Grubhub, Toloka's 140% revenue growth, and TripleTen's doubling of new student additions in 2024.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.