Nebius Group (NBIS) AI Stock Analysis

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Nebius Group

(NASDAQ:NBIS)

Rating:47Neutral

Price Target:―

Nebius Group's stock score is primarily affected by its financial distress, characterized by declining revenues and profitability, and weak cash flow management. Technical analysis suggests bearish momentum, and the negative P/E ratio raises valuation concerns. However, the company's strategic growth plans and successful capital raise provide a more optimistic outlook for the future, albeit with some execution risks.

Positive Factors

AI Infrastructure

Nebius Group is emerging as a strong public alternative in the AI compute market, appealing particularly to smaller enterprises, research universities, startups, and individuals.

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.

Negative Factors

Capital Expenditures

NBIS spent more than $540 million on capital expenditures in the first quarter and is now projecting as much as $2 billion total for the full year as it tries to keep up with demand.

Revenue Shortfall

NBIS reported first quarter revenue of $55.3 million compared to the analyst's estimate of $77.5 million.

Nebius Group (NBIS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$9.00B

Dividend YieldN/A

Average Volume (3M)9.33M

Price to Earnings (P/E)189.8

Beta (1Y)1.36

Revenue Growth-98.74%

EPS Growth-128.03%

CountryUS

Employees1,371

SectorCommunication Services

Sector Strength86

IndustryInternet Content & Information

Share Statistics

EPS (TTM)-0.43

Shares Outstanding202,410,160

10 Day Avg. Volume14,538,781

30 Day Avg. Volume9,334,964

Financial Highlights & Ratios

PEG Ratio-0.62

Price to Book (P/B)2.64

Price to Sales (P/S)0.00

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

$52.33

Price Target Upside35.61% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Nebius Group Business Overview & Revenue Model

Company DescriptionNebius Group N.V., operates as a technology company that engages in building full-stack infrastructure to service the global AI industry. Its businesses include Nebius, an AI-centric cloud platform built for intensive AI workloads. Nebius builds full-stack infrastructure for AI, including large-scale GPU clusters, cloud platforms, and tools and services for developers. The company's businesses also comprise Toloka AI, a data partner for various stages of generative AI development; TripleTen, an edtech player re-skilling people for careers in tech; and Avride, which develops autonomous driving technology for self-driving cars and delivery robots. The company was formerly known as Yandex N.V. and changed its name to Nebius Group N.V. in August 2024. Nebius Group N.V. was founded in 1989 and is headquartered in Amsterdam, the Netherlands with R&D hubs across Europe, North America and Israel.

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

Negative

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.

Balance Sheet

Neutral

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.

Cash Flow

Negative

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Positive

Last Price38.59

Price Trends

50DMA

26.63

Positive

100DMA

30.47

Positive

200DMA

25.98

Positive

Market Momentum

MACD

3.86

Negative

RSI

73.28

Negative

STOCH

71.17

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NBIS, the sentiment is Positive. The current price of 38.59 is above the 20-day moving average (MA) of 31.13, above the 50-day MA of 26.63, and above the 200-day MA of 25.98, indicating a bullish trend. The MACD of 3.86 indicates Negative momentum. The RSI at 73.28 is Negative, neither overbought nor oversold. The STOCH value of 71.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPRA	80 Outperform	$1.60B	24.20	9.18%	4.37%	26.71%	-23.67%
YELP	77 Outperform	$2.43B	18.30	19.74%	―	5.93%	29.17%
EVER	71 Outperform	$818.95M	22.01	32.17%	―	113.43%	―
IAC	63 Neutral	$2.92B	―	-15.07%	―	-18.11%	-516.37%
Sector *	60 Neutral	$14.12B	6.43	-3.57%	3.69%	2.49%	-35.43%
NBIS	47 Neutral	$9.00B	189.78	-10.51%	―	-98.74%	-128.03%
DJT		$5.49B	―	-19.06%	―	―	―

* Communication Services Sector Average

Performance Comparison

NBIS

Nebius Group

38.59

19.65

103.75%

YELP

Yelp

37.40

1.02

2.80%

EVER

EverQuote

22.59

-1.47

-6.11%

OPRA

Opera

17.37

4.11

31.00%

IAC

IAC/InteractiveCorp.

36.31

-4.72

-11.50%

DJT

Truth Social

25.72

-20.09

-43.86%

Nebius Group Earnings Call Summary

Earnings Call Date:May 20, 2025

(Q1-2025)

% Change Since: 2.74%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Positive

The earnings call presented a positive outlook with exceptional revenue growth and strategic partnerships. However, challenges remain with profitability and increased capital expenditure. The company shows promise in expanding its market presence and technological advancements.

Q1-2025 Updates

Positive Updates

Explosive Revenue Growth

Revenue grew nearly 400% year-over-year, and annualized run rate revenue increased by nearly 700%.

Strong Cash Position

Ended the quarter with a solid cash balance of $1.4 billion.

New Partnerships and Locations

Established partnerships with NVIDIA, Meta, and Llama; added new locations in the U.S., Europe, and the Middle East.

Product Launches and Technological Advancements

Launched Slurm-based cluster upgrades, improved object storage, and expanded integrations with AI platforms.

Customer and Market Expansion

Hundreds of customers across various industries, with strong demand in AI compute continuing into Q2.

Negative Updates

Negative Adjusted EBITDA Guidance

Expect adjusted EBITDA to be negative for the full year, with a plan to turn positive in the second half of 2025.

Increased CapEx Guidance

Raised CapEx guidance to approximately $2 billion for 2025, up from the previous guidance of $1.5 billion.

Long-Term Profitability Challenges

While aiming for mid-term EBIT margins of 20% to 30%, profitability remains a future goal, with potential for higher long-term margins.

Company Guidance

During the earnings call for Q1 2025, Nebius reported a remarkable revenue growth of nearly 400% year-over-year and an annualized run rate revenue increase of almost 700%. The company ended the quarter with a solid cash balance of $1.4 billion and plans to invest approximately $2 billion in CapEx for 2025, up from the previous guidance of $1.5 billion. This increase is partly due to new opportunities, such as a data center in Israel. Nebius also announced several partnerships, including those with NVIDIA, Meta, and Llama, and highlighted industry recognition from SemiAnalysis. The company reiterated its ARR guidance for the full year, set between $750 million to $1 billion, and overall revenue guidance ranging from $500 million to $700 million. Despite expecting adjusted EBITDA to be negative for the full year, they plan to achieve profitability in the second half of 2025. Looking ahead, Nebius aims for mid-single-digit billions in revenue in the midterm with expected EBIT margins of 20% to 30%.

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.