Nutanix (NTNX) Soars 25.1% Amid Industry Challenges
Nutanix NTNX shares have surged 25.1% in the past six months, significantly outperforming the Zacks Computer and Technology sector’s gains of 0.4% and the Zacks Computers – IT Services industry’s increase of 10.4%.
In comparison, NTNX has also eclipsed rivals like DXC Technology DXC and TaskUs TASK during this period. While DXC’s shares rose by 1.7%, TaskUs shares fell by 5.9% in the same timeframe.
Strong Position Driving Growth
NTNX’s impressive performance stems from its strategic role as a vital partner for organizations shifting towards hybrid multi-cloud operating models. Its cutting-edge product lineup features the Nutanix Cloud Platform, Nutanix Cloud Management, Kubernetes Platform, Nutanix Unified Storage Edge, and Nutanix Database Service.
Nutanix’s Enterprise AI is uniquely adaptable, capable of operating within GPT-in-a-box environments on-premises or at the edge, and independently on platforms such as Amazon’s AMZN AWS Elastic Kubernetes Service and Microsoft’s Azure Kubernetes Service.
Expanding its collaboration with AWS, Nutanix is making cloud transitions easier. This enhanced partnership includes promotional credits for migrations and proofs of concept, as well as VMware Cloud migrations to Nutanix Cloud Clusters (NC2) on AWS. These efforts further bolster NTNX’s growth prospects.
Despite this success, NTNX faces hurdles due to the uncertain macroeconomic landscape, which has lengthened sales cycles amid tightened IT budgets. Larger deals often necessitate C-suite approval, resulting in delays that impact NTNX’s revenue growth trajectory.
2025 Guidance Reflects Ongoing Caution
Looking ahead to 2025, NTNX anticipates opportunities to deepen its engagement with existing clients and sees rising interest in its solutions. However, the company foresees uncertainty regarding the timing, outcomes, and structure of larger deals in its pipeline. Furthermore, NTNX expects sales cycles to extend beyond historical norms due to the unpredictable spending environment.
For fiscal year 2025, Nutanix is projecting revenues between $2.435 billion and $2.465 billion, indicating a year-over-year growth of 14% at the midpoint. The non-GAAP operating margin is expected to hover around 16% to 17%.
Earnings Estimates Steady for 2025 and 2026
The Zacks Consensus Estimate for NTNX’s fiscal year 2025 revenues stands at $2.46 billion, suggesting a 14.5% increase compared to the previous year. Currently, the consensus for fiscal 2025 earnings is set at $1.49 per share, showing no change over the past month, and indicating year-over-year growth of 13.74%.
For fiscal year 2026, the Zacks Consensus Estimate sees revenues at $2.84 billion, marking a year-over-year growth of 15.56%. Earnings are pegged at $1.86 per share, with no recent changes, reflecting a year-over-year increase of 25.19%.
NTNX has consistently exceeded the Zacks Consensus Estimate for earnings in the last four quarters, with an average surprise of 48.45%.
Nutanix Price and Consensus
Nutanix price-consensus-chart | Nutanix Quote
Discover the latest EPS estimates and surprises on Zacks Earnings Calendar.
Investor Outlook on NTNX Stock
NTNX continues to thrive thanks to its robust product offerings, strengthening alliances, and solid market positioning, despite facing broader economic challenges.
Currently, NTNX holds a Zacks Rank #3 (Hold), suggesting that investors might consider waiting for a more advantageous entry point into the stock. For a broader investment perspective, you can view the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
