Nutanix (NTNX) Stock Forecast & Price Target

Nutanix Inc. reported revenue of $654.7 million, reflecting a 16% year-over-year growth, which surpassed management's guidance range and highlighted the company's robust performance. The upgraded FY/25 guidance, with expected revenue increasing to $2,505 million and operating margin at 18%, underscores the company’s strong new logo growth and effective renewal strategies, bolstered by a healthy customer retention rate exceeding 90%. Furthermore, Nutanix's commitment to ramping up sales and marketing, as well as research and development investments, positions the company for sustained profitability and substantial free cash flow generation in the coming years.

Nutanix Inc's negative outlook is primarily driven by anticipated declines in revenue and profit margins, suggesting a diminished growth trajectory compared to large-cap software peers, resulting in a potentially reduced EV/S multiple. Furthermore, challenges such as decreased technology spending, slower customer acquisition, lower renewal rates, and ongoing hardware supply chain issues could exacerbate this situation. Additionally, the company's historical pattern of operating losses raises concerns about its ability to achieve profitability, which, coupled with a volatile macroeconomic environment, poses significant risks to its financial stability and stock performance.