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NTNX Gains 25% in 6 Months: Here's Why You Should Hold on to the Stock

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Nutanix (NTNX - Free Report) shares have gained 25.1% over the past six months, outperforming the Zacks Computer and Technology sector’s appreciation of 0.4% and the Zacks Computers – IT Services industry’s return of 10.4%.

NTNX shares have also outperformed the industry peers like DXC Technology (DXC - Free Report) and TaskUs (TASK - Free Report) in the same time frame. While DXC shares have appreciated 1.7%, TASK shares have lost 5.9% over the past six months.

NTNX shares have been riding on the company’s strong positioning as a key partner for organizations modernizing their IT with hybrid multi-cloud operating models. Its innovative product portfolio includes the Nutanix Cloud Platform, Nutanix Cloud Management, Kubernetes Platform, Nutanix Unified Storage Edge and Nutanix Database Service offerings.

Nutanix’s Enterprise AI can be deployed within GPT-in-a-box on premises or at the edge, or independently on native public cloud services like Amazon’s (AMZN - Free Report) AWS Elastic Kubernetes Service and Microsoft’s Azure Kubernetes Service.

Nutanix’s expanded collaboration with AWS is simplifying cloud migrations. This strengthened partnership includes promotional credits for migrations, proofs of concept and VMware Cloud migrations to Nutanix Cloud Clusters (NC2) on AWS, further improving NTNX’s prospects.

However, NTNX has been facing challenges from an uncertain macroeconomic environment, which has led to elongated sales cycles due to increased scrutiny on IT spending. Larger opportunities often require C-suite approvals, causing delays and greater variability in deal timing and structure, impacting NTNX’s revenue growth trajectory.

NTNX 2025 Guidance Not So Rosy

In 2025, NTNX sees opportunities to expand its reach with existing clients and a growing interest in its solutions. However, it expects uncertainty regarding the timing, outcomes and structure of larger deals in its pipeline. Furthermore, NTNX expects longer sales cycles compared to the past, likely due to the uncertain spending environment.

For the full-year fiscal 2025, Nutanix expects revenues of $2.435-$2.465 billion, representing year-over-year growth of 14% at the midpoint. The non-GAAP operating margin is expected to be approximately 16% to 17%.

NTNX’s 2025 & 2026 Earnings Estimate Trend Steady

The Zacks Consensus Estimate for NTNX’s fiscal year 2025 revenues is pegged at $2.46 billion, indicating growth of 14.5% on a year-over-year basis. The consensus mark for fiscal 2025 earnings is currently pegged at $1.49 per share, unchanged over the past 30 days, and indicating year-over-year growth of 13.74%.

The Zacks Consensus Estimate for NTNX’s fiscal 2026 revenues is pegged at $2.84 billion, indicating growth of 15.56% on a year-over-year basis. The consensus mark for NTNX’s fiscal 2026 earnings is currently pegged at $1.86 per share, unchanged over the past 30 days, and indicating year-over-year growth of 25.19%.

NTNX beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 48.45%.

Nutanix Price and Consensus

 

Nutanix Price and Consensus

Nutanix price-consensus-chart | Nutanix Quote

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

What Should Investors Do With NTNX Stock?

NTNX benefits from its robust product portfolio, strengthening partnerships and strong market positioning amid macroeconomic challenges.

NTNX currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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