Nutanix (NTNX, Financial) has teamed up with Pure Storage to create an integrated solution aimed at simplifying the deployment and management of virtual workloads on modern, scalable infrastructure. This collaboration combines the power of Nutanix Cloud Infrastructure, which includes the Nutanix AHV hypervisor and Nutanix Flow virtual networking and security, with Pure Storage's FlashArray utilizing NVMe/TCP technology. The partnership is set to provide an optimized experience tailored for managing high-demand data workloads, such as those associated with artificial intelligence applications.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Nutanix Inc (NTNX, Financial) is $87.71 with a high estimate of $100.00 and a low estimate of $73.11. The average target implies an upside of 20.47% from the current price of $72.81. More detailed estimate data can be found on the Nutanix Inc (NTNX) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, Nutanix Inc's (NTNX, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Nutanix Inc (NTNX, Financial) in one year is $42.47, suggesting a downside of 41.67% from the current price of $72.805. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Nutanix Inc (NTNX) Summary page.
NTNX Key Business Developments
Release Date: February 26, 2025
- Revenue: $655 million, representing a year-over-year growth rate of 16%.
- Annual Recurring Revenue (ARR): $2.06 billion, a year-over-year growth of 19%.
- Non-GAAP Gross Margin: 88.3%.
- Non-GAAP Operating Margin: 24.6%, higher than the guided range of 20% to 21%.
- Non-GAAP Net Income: $165 million or $0.56 per share.
- GAAP Net Income: $56 million or $0.19 per share.
- Free Cash Flow: $187 million, representing a free cash flow margin of 29%.
- Cash, Cash Equivalents, and Short-term Investments: $1.743 billion at the end of Q2.
- Convertible Notes Issuance: $862.5 million in convertible notes due 2029.
- Share Repurchase: $200 million in shares repurchased.
- Q3 Fiscal '25 Revenue Guidance: $620 million to $630 million.
- Full Year Fiscal '25 Revenue Guidance: $2.495 billion to $2.515 billion, approximately 17% growth at the midpoint.
- Full Year Fiscal '25 Free Cash Flow Guidance: $650 million to $700 million, approximately 27% margin at the midpoint.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nutanix Inc (NTNX, Financial) reported second-quarter results that exceeded all guided metrics, with a 19% year-over-year ARR growth to $2.06 billion.
- The company achieved record quarterly revenue of $655 million, surpassing the guided range and representing a 16% year-over-year growth.
- Nutanix Inc (NTNX) strengthened its balance sheet by issuing convertible notes at attractive terms and establishing a revolving credit facility.
- The company saw significant wins with large organizations, including a Global 2000 energy technology company and a national health ministry in the EMEA region.
- Nutanix Inc (NTNX) raised its fiscal year 2025 outlook across all metrics, reflecting confidence in continued growth and market opportunities.
Negative Points
- Nutanix Inc (NTNX) continues to face elongated sales cycles and variability in timing and deal structure, particularly with larger deals.
- The company noted challenges with data security, compliance, and performance as priorities for enterprises implementing GenAI.
- Despite strong results, Nutanix Inc (NTNX) acknowledged the ongoing dynamic and uncertain macroeconomic environment.
- The company anticipates increased investment in sales, marketing, and R&D in the second half of the fiscal year, which may impact margins.
- Nutanix Inc (NTNX) faces competition from VMware, with customers having multiyear contracts and hardware refresh cycles affecting migration timing.
