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Nutanix (NTNX)
NASDAQ:NTNX
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Nutanix
(NASDAQ:NTNX)69Neutral
Positive Factors
Earnings
Nutanix Inc delivered results better than expected with new logo growth exceeding 50%, adding 710 new customers.
Financial Performance
Nutanix Inc raised all FY25 guided metrics, including revenue, operating margin, and free cash flow.
Negative Factors
Market Competition
Management's disclosure that the U.S. Federal Government has averaged 10% or less of annual Revenue over the last 3 years helps allay concerns on weaker Federal trends in the prior quarter.
Nutanix (NTNX) vs. S&P 500 (SPY)
Market Cap
$20.65B
Dividend YieldN/A
Average Volume (3M)2.41M
Price to Earnings (P/E)―
Beta (1Y)1.46
Revenue Growth14.82%
EPS Growth14.06%
CountryUS
Employees7,150
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)-0.28
Shares Outstanding267,928,250
10 Day Avg. Volume3,533,198
30 Day Avg. Volume2,409,727
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)9.31
Price to Cash Flow (P/CF)32.10
P/FCF Ratio34.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$91.15Price Target Upside18.22% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
Nutanix Business Overview & Revenue Model
Company DescriptionNutanix, Inc. engages in the provision of enterprise virtualization and storage solutions. It specializes in cloud operating system that converges traditional silos of server, virtualization, storage, and networking into one integrated solution and unifies private and public cloud into a single software fabric. Its products are offered through the Acropolis and Prism brands. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.
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 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.Income Statement
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.72
Positive
Balance Sheet
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.55
Neutral
Cash Flow
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.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| 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 |
| 145.62M | 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 | ||||
| 1.31B | 994.34M | 1.44B | 1.32B | 1.21B | 719.78M | Total Assets |
| 2.37B | 2.14B | 2.53B | 2.37B | 2.28B | 1.77B | Total Debt |
| 1.30B | 684.60M | 1.32B | 1.43B | 1.18B | 643.59M | Net Debt |
| 894.85M | 29.32M | 803.74M | 1.03B | 899.24M | 324.85M | Total Liabilities |
| 3.15B | 2.87B | 3.23B | 3.16B | 3.29B | 2.04B | Stockholders Equity |
| -782.68M | -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
Positive
77.10
Price Trends
67.72
Positive
67.05
Positive
61.79
Positive
Market Momentum
2.32
Negative
67.52
Neutral
80.59
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 77.1 is above the 20-day moving average (MA) of 72.19, above the 50-day MA of 67.72, and above the 200-day MA of 61.79, indicating a bullish trend. The MACD of 2.32 indicates Negative momentum. The RSI at 67.52 is Neutral, neither overbought nor oversold. The STOCH value of 80.59 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 60 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 0 New Risks
Nutanix Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $29.74B | ― | -3.24% | ― | 30.77% | 79.05% | |
77 Outperform | $96.10B | 721.64 | -0.69% | ― | 31.35% | ― | |
74 Outperform | $186.65B | 133.88 | 16.53% | ― | 22.44% | -18.31% | |
69 Neutral | $20.65B | ― | 6.85% | ― | 14.82% | 14.06% | |
66 Neutral | $39.58B | 224.13 | 7.75% | ― | 26.12% | 274.50% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
42 Neutral | $539.34M | ― | 81.52% | ― | -8.37% | 30.83% |
* Technology Sector Average
Performance Comparison
NTNX
Nutanix
77.10
12.59
19.52%
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915.79
174.73
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196.45
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CrowdStrike Holdings
365.44
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10.88%
DDOG
Datadog
115.09
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-7.63%
RXT
Rackspace Technology
2.41
0.57
30.98%
Nutanix Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 11.18% | 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.Highlights
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.
Lowlights
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
Private Placements and FinancingBusiness Operations and Strategy
Nutanix Plans $500 Million Credit Facility by 2025
Neutral
Dec 10, 2024
Nutanix, Inc. plans to establish a $500 million revolving credit facility by March 31, 2025, arranged by a syndicate of financial institutions, to be used for general corporate purposes. The agreement will likely include customary covenants that could restrict the company’s financial actions, though terms remain undetermined and are subject to market conditions and other events.
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.