Nutanix (NTNX) has drawn fresh investor attention after reporting fourth quarter revenue of US$757.08 million and net income of US$1,269.63 million, together with full year earnings and new fiscal 2027 revenue guidance.
Nutanix shares are trading at US$68.08, with a 30 day share price return of 10.7% and a 90 day share price return of 26.92%, suggesting momentum has picked up recently, even though the 1 year total shareholder return is slightly down 0.86%.
Scan other AI infrastructure stocks that show similar momentum traits in our hand picked 55 AI infrastructure stocks.
Nutanix now appears to be a much stronger, more profitable business than it was a year ago, and the share price has started to reflect that. The key question is whether the recent run up already captures that strength.
Most Popular Narrative: 15% Overvalued
Nutanix is trading at US$68.08, while the most followed narrative anchors fair value closer to US$58.98. This sets up a clear valuation gap for investors to interrogate.
The analysts have a consensus price target of $58.98 for Nutanix based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $65.0, and the most bearish reporting a price target of just $47.0.
Want to see what is baked into that fair value cut? The narrative leans on specific revenue paths, tightening margins, and a future earnings multiple that carries real implications.
Result: Fair Value of $58.98 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are still important risks for Nutanix, including customer concentration and ongoing pricing pressure from large public cloud and IT infrastructure competitors.
Find out about the key risks to this Nutanix narrative.
Another View On Nutanix Valuation
The analyst narrative suggests Nutanix is around 15% overvalued based on a fair value of US$58.98. Our DCF model points in the opposite direction. It values Nutanix at about US$80.07 per share, which is roughly 15% above the current US$68.08 price. Which set of assumptions appears more realistic for the next few years?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
If this Nutanix story appears finely balanced between promise and risk, consider reviewing the numbers yourself and forming your own view using the 2 key rewards and 1 important warning sign.
Looking for more investment ideas beyond Nutanix?
If Nutanix has sharpened your focus, do not stop here. Use the Simply Wall Street Screener to uncover other stock ideas that match your style and risk comfort.
- Target dependable cash generators by scanning a list of solid balance sheet and fundamentals (53 results) that can help anchor a more resilient portfolio.
- Hunt for mispriced opportunities with the 52 high quality undervalued stocks that highlights companies combining quality with potential upside.
- Spot future market favorites early through the 21 high quality undiscovered gems that filters for strong fundamentals most investors may be overlooking.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com