Nutanix (NTNX) Stock Forecast & Price Target

Nutanix reported revenue of $654.7 million for the fiscal year, reflecting a year-over-year growth of 16%, surpassing management's expectations and highlighting the company's strong market performance. The updated fiscal year 2025 guidance includes an increase in expected revenue to $2.505 billion and an improvement in operating margin to 18%, supported by robust customer retention rates exceeding 90% and net expansion rates above 110%. Additionally, Nutanix's focus on renewing contracts, alongside strategic investments in sales and marketing as well as research and development, positions the company favorably for future profitability and significant revenue growth potential.

Nutanix's revenue and margins are projected to experience downward pressure, potentially leading to a valuation multiple of 6x CY25E EV/S, which reflects a significant discount compared to large-cap software peers. Concerns about reduced technology spending, challenges in expanding the customer base, and lower renewal rates are contributing factors, along with the company’s historical tendency for declining growth rates. Additionally, Nutanix has faced persistent operating losses, and any adverse macroeconomic developments or shifts in investor sentiment towards high-growth tech stocks could exacerbate its financial instability.