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what it is
Nutanix sells software that helps companies run apps and data across private clouds and public clouds from one control layer.
how it gets paid
Last year Nutanix made $2.5B in revenue. cloud platform subscriptions was the main engine at $1.15B, or 46% of sales.
why it's growing
Revenue grew 18.1% last year. The 87.2% gross margin mattered most because it shows the product is strong enough to support much higher operating profit if execution holds.
what just happened
Nutanix posted $1.4B in quarterly revenue and EPS of $0.57, beating expectations but not calming investors.
At a glance
B balance sheet — gets the job done, barely
30/100 earnings predictability — expect surprises
32.7x trailing p/e — you're paying up for this one
59.5% return on capital — a money-printing machine
xvary composite: 39/100 — weak
What they do
Nutanix sells software that helps companies run apps and data across private clouds and public clouds from one control layer.
Nutanix has more than 29,000 end-customers and an 87.2% gross margin. Gross margin → money left after delivering the software → so what: this is software people keep paying for, not a low-price commodity. Once your apps and data sit inside one operating layer across clouds, ripping it out is painful for your team and risky for your uptime.
How they make money
$2.5B
annual revenue · their business grew +18.1% last year
cloud platform subscriptions
$1.15B
+18.1%
support and entitlements
$0.63B
+10.0%
hybrid multicloud infrastructure software
$0.40B
+15.0%
database and data services
$0.20B
+20.0%
container and kubernetes products
$0.12B
+25.0%
The products that matter
hybrid multicloud infrastructure software
Nutanix Cloud Platform
$1.4B revenue engine
It is the core business, and the 88.6% non-GAAP gross margin tells you why the market still gives this story the benefit of the doubt.
core platform
recurring software subscriptions
Software & Subscriptions
$1.3B · 93% of mix shown
This line grew 4.2%, and the related ARR base grew 18% from last year. That's the part of the model investors are really underwriting.
18% arr growth
customer support and services
Support & Services
$100M · 7% of mix shown
It is small and flat, which tells you this is not a labor-heavy services story. The software carries the valuation.
small wrapper
Key numbers
$4.0B
2028 revenue
That is the 2028 revenue estimate versus $2.5B today, which implies about $1.5B of added sales still needs to show up.
59.5%
return on capital
Return on capital → profit produced from each dollar invested → so what: Nutanix turns investment into earnings far better than most software peers.
6.8%
operating margin
Operating margin → profit after running the business → so what: Nutanix is profitable, but the cushion is still thinner than its 87.2% gross margin suggests.
32.7x
trailing p/e
Trailing P/E → price versus past 12 months of earnings → so what: you are paying up for future execution, not current perfection.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 20 / 100
- long-term debt $1.3B (9% of capital)
- net profit margin 17.2% — keeps 17 cents of every dollar in revenue
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in NTNX 3 years ago → it's now worth $18,960.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Nutanix posted $1.4B in quarterly revenue and EPS of $0.57, beating expectations but not calming investors.
Revenue rose 93% vs. prior year in the latest quarter, and EPS rose 58%. The quarter was good. The problem was guidance and supply chain commentary, which hit confidence harder than the beat helped it.
$1.4B
revenue
$0.57
eps
87.2%
gross margin
the number that mattered
The 87.2% gross margin mattered most because it shows the product is strong enough to support much higher operating profit if execution holds.
-
shares of nutanix have hit the skids.
-
the stock has sank over 35% in value since our last full-page review in october.the company posted disappointing results for the fiscal 2026 first quarter (ended october 31st) and management offered tepid guidance for the remainder of the fiscal year.
-
investors were obviously not pleased by the results, which sent the stock reeling.
-
in our view however, the sell-off was overdone.
-
we have lowered our fiscal 2026 estimates.nutanix got off to a sluggish start as october-quarter revenues of $670.6 and adjusted earnings of $0.42 per share both were shy of wall street consensus. management stated that although order rates were in line with expectations, some of its revenues would be booked in the future. with that in mind, we have slashed our fiscal 2026 top-line estimate by $60 million, to $2.85 billion.
source: company earnings report, 2026
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What could go wrong
the #1 risk is guidance slipping because customer deployments land later than expected.
med
Supply-chain delays hit timing
Management cited supply-chain issues and longer lead times in Q2 FY2026. When a $723M quarter depends on deals landing on time, timing becomes the story.
If deployments slip, revenue recognition slips with them — and a stock already punished for guidance hears that immediately.
med
Another guide-down would hit credibility first
The stock fell about 20% after earnings and Barclays cut its target to $53 from $64. That is what happens when a 32.7x multiple stops trusting the next quarter.
This is less about one bad print and more about whether investors believe management's read on demand from here.
med
ARR growth can cool faster than the narrative
ARR grew 18% from last year, which is good. If that slips below 15%, the recurring software story starts to look less premium and more ordinary.
At that point, the market has a much harder time defending premium valuation on just 4.2% software growth in this view.
med
Headline risk keeps pressure on sentiment
The shareholder investigation adds noise on top of a stock already trading inside a wide $43–$83 range. Even when the legal outcome is unclear, the headline drag is real.
You can own a good business and still get a weak tape. NTNX is showing you both at once.
A stock at 32.7x trailing earnings does not have much patience for 4.2% software growth, another guide reset, or a slower ARR number.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
ARR growth staying above 15%
It is 18% now. If it falls below 15%, the recurring engine starts to look less special and the valuation argument gets thinner.
calendar
Q3 FY2026 earnings call
Expected in late May 2026. Watch whether management sounds cleaner on deployment timing and whether operating margin stays near 26.2%.
risk
More target cuts from the sell side
The midpoint still sits at $75, but Barclays is already at $53. If more targets drift toward the current price, sentiment can stay stuck even if the business stays decent.
trend
Where the stock lives inside the $43–$83 range
Trading near the lower half tells you investors are still pricing in execution risk. A durable move higher would suggest the market believes the worst of the guidance scare is past.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this has more near-term downside risk than upside momentum.
risk profile
below average
stability score 4 — this is more volatile than most stocks, so your position will probably feel that way too.
chart momentum
average
technical score 3 — there is no special signal here yet. The chart needs to prove the selloff is done.
earnings predictability
30 / 100
Low predictability means the market is still learning how steady this model really is. That usually keeps the multiple jumpy.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 354 buyers vs. 274 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$41
$109
$53
current price
$75
target midpoint · +42% from current · 3-5yr high: $105 (+100% · 19% ann'l return)
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