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8 Reasons to Add Nutanix (NTNX) Stock to Your Portfolio
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Nutanix (NTNX - Free Report) is currently one of the top-performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals.
Therefore, investors should consider adding the stock to their portfolio to shrug off the prevailing highly volatile market environment and make some gains from its upside potential.
Here’s Why NTNX is an Attractive Pick
An Outperformer: A glimpse at NTNX’s price trend reveals that the stock has gained 74% in the past year, outperforming the Zacks Computers - IT Services industry’s and S&P 500’s growth of 8.9% and 13.7%, respectively.
Attractive Valuation: Nutanix currently trades at an attractive valuation multiple. The stock trades at a one-year forward price-to-sales multiple of 3.14X compared with its five-year average of 3.72X.
Trading Way Below 52-Week High: The stock currently trades lower than its 52-week high, which reflects its potential to go upward. Its closing price of $27.27 on Jul 6 is 19.2% lower than the 52-week high of $33.73 attained on Dec 14, 2022.
Solid Rank & Growth Score: Nutanix currently carries a Zacks Rank #2 (Buy) and a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2023 and 2024 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2023 and 2024 moved north by 4 cents and 2 cents, respectively.
Positive Earnings Surprise History: Nutanix has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average surprise being 93.8%.
Strong Earnings Growth Potential: The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at 49 cents per share, suggesting year-over-year growth of 206.5%. The consensus mark for fiscal 2024 earnings is pegged at 69 cents per share, indicating a year-over-year increase of 40.1%.
Robust Fundamental Growth Drivers: Nutanix is benefiting from the solid adoption of its hybrid cloud solutions and an expanding clientele. The company is considered a pioneer of the hyper-converged infrastructure (HCI) market, which is projected to grow rapidly in the long term. Gartner recognized the software maker as a 2022 Gartner Peer Insights Customers’ Choice vendor for HCI for the fourth time.
Strong adoption of Nutanix products and a high customer satisfaction rate are helping the company to expand its customer base. The company’s built-in hypervisor has been gaining significant traction as customers continue to select it as a low-cost alternative to other vendor offerings. Its cloud-based deployment strategy is a differentiator. NTNX’s Xi Cloud Services is expected to challenge AWS, Microsoft Azure and Google Cloud in the infrastructure-as-a-service market.
Nutanix’s growing recurring revenue stream reflects customer loyalty to its solution portfolio, which improves the visibility of its revenue growth trajectory. During the third-quarter fiscal 2023 earnings release, the company added 430 new customers, bringing the total client number to 24,050. Further, the company’s transition to software-only sales is expected to significantly boost gross margin. In fiscal third-quarter, the non-GAAP gross margin expanded 50 basis points year over year to 83.8%.
The San Jose, CA-based company reported revenues of $448.6 million in the fiscal third quarter. Subscriptions, Non-Portable Software, Hardware and Professional Services accounted for 93.1%, 1.9%, 0.1% and 4.9% of revenues, respectively, in the reported quarter. The Zacks Consensus Estimate for fourth-quarter fiscal 2023 revenues is pegged at $475.7 million, which suggests 23.4% growth from the year-ago quarter’s $385.5 million.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 18.9% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised southward from $1.97 to $2.04 per share over the past 30 days. For 2023, earnings estimates have moved up by 2.7% to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 165.6% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised downward by 5 cents to $2.82 per share over the past 30 days. For 2023, earnings estimates have moved south from $12.04 to $11.94 in the past 30 days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 69% in the past year.
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8 Reasons to Add Nutanix (NTNX) Stock to Your Portfolio
Nutanix (NTNX - Free Report) is currently one of the top-performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals.
Therefore, investors should consider adding the stock to their portfolio to shrug off the prevailing highly volatile market environment and make some gains from its upside potential.
Here’s Why NTNX is an Attractive Pick
An Outperformer: A glimpse at NTNX’s price trend reveals that the stock has gained 74% in the past year, outperforming the Zacks Computers - IT Services industry’s and S&P 500’s growth of 8.9% and 13.7%, respectively.
Nutanix Price and Consensus
Nutanix price-consensus-chart | Nutanix Quote
Attractive Valuation: Nutanix currently trades at an attractive valuation multiple. The stock trades at a one-year forward price-to-sales multiple of 3.14X compared with its five-year average of 3.72X.
Trading Way Below 52-Week High: The stock currently trades lower than its 52-week high, which reflects its potential to go upward. Its closing price of $27.27 on Jul 6 is 19.2% lower than the 52-week high of $33.73 attained on Dec 14, 2022.
Solid Rank & Growth Score: Nutanix currently carries a Zacks Rank #2 (Buy) and a Growth Score of A. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities to investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Analysts have raised the estimates for fiscal 2023 and 2024 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2023 and 2024 moved north by 4 cents and 2 cents, respectively.
Positive Earnings Surprise History: Nutanix has an impressive earnings surprise history. The company outpaced estimates in each of the trailing four quarters, the average surprise being 93.8%.
Strong Earnings Growth Potential: The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at 49 cents per share, suggesting year-over-year growth of 206.5%. The consensus mark for fiscal 2024 earnings is pegged at 69 cents per share, indicating a year-over-year increase of 40.1%.
Robust Fundamental Growth Drivers: Nutanix is benefiting from the solid adoption of its hybrid cloud solutions and an expanding clientele. The company is considered a pioneer of the hyper-converged infrastructure (HCI) market, which is projected to grow rapidly in the long term. Gartner recognized the software maker as a 2022 Gartner Peer Insights Customers’ Choice vendor for HCI for the fourth time.
Strong adoption of Nutanix products and a high customer satisfaction rate are helping the company to expand its customer base. The company’s built-in hypervisor has been gaining significant traction as customers continue to select it as a low-cost alternative to other vendor offerings. Its cloud-based deployment strategy is a differentiator. NTNX’s Xi Cloud Services is expected to challenge AWS, Microsoft Azure and Google Cloud in the infrastructure-as-a-service market.
Nutanix’s growing recurring revenue stream reflects customer loyalty to its solution portfolio, which improves the visibility of its revenue growth trajectory. During the third-quarter fiscal 2023 earnings release, the company added 430 new customers, bringing the total client number to 24,050. Further, the company’s transition to software-only sales is expected to significantly boost gross margin. In fiscal third-quarter, the non-GAAP gross margin expanded 50 basis points year over year to 83.8%.
The San Jose, CA-based company reported revenues of $448.6 million in the fiscal third quarter. Subscriptions, Non-Portable Software, Hardware and Professional Services accounted for 93.1%, 1.9%, 0.1% and 4.9% of revenues, respectively, in the reported quarter. The Zacks Consensus Estimate for fourth-quarter fiscal 2023 revenues is pegged at $475.7 million, which suggests 23.4% growth from the year-ago quarter’s $385.5 million.
Other Stocks to Consider
Some other top-ranked stocks from the broader Computer and Technology sector are Salesforce (CRM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Meta Platforms (META - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 18.9% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised southward from $1.97 to $2.04 per share over the past 30 days. For 2023, earnings estimates have moved up by 2.7% to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 165.6% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised downward by 5 cents to $2.82 per share over the past 30 days. For 2023, earnings estimates have moved south from $12.04 to $11.94 in the past 30 days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 69% in the past year.