Nutanix (NTNX) Stock Forecast & Price Target

Nutanix Inc. reported revenue of $654.7 million, reflecting a year-over-year growth of 16% and surpassing management's guidance range of $635 million to $645 million. The company raised its fiscal year 2025 guidance, projecting a midpoint revenue of $2.505 billion, supported by strong new logo growth, high customer retention rates above 90%, and net expansion rates exceeding 110%. Furthermore, Nutanix is expected to increase investments in sales and marketing as well as research and development, positioning itself well for future profitability and free cash flow improvements as it builds a robust base of renewals.

Nutanix Inc faces significant revenue and margin pressures, with projections suggesting a potential decline in growth that could result in a multiple contraction to a 6x CY/25E EV/S ratio, which would place it at a discount compared to large-cap software peers. Concerns about insufficient tech spending, challenges in expanding customer bases, lower renewal rates, and supply chain issues contribute to a less favorable growth and margin profile, indicating that the stock may be subjected to a lower valuation multiple as a result. Additionally, the company’s historical trend of operating losses raises the risk of ongoing unprofitability, exacerbated by external macroeconomic shocks and shifts in investor sentiment towards high-growth technology stocks, which could introduce substantial price volatility.