Nutanix (NASDAQ:NTNX) ended fiscal 2025 with a stronger-than-expected fourth quarter, posting double-digit revenue growth and signaling traction from large strategic deals and deepening industry partnerships. Yet, near-term contract timing issues clouded investor sentiment, sending shares lower.
The company reported fourth-quarter revenue of $653.3 million, a 19% increase from the prior year and above guidance, as it benefited from steady new customer additions and expanding enterprise adoption. However, annual recurring revenue (ARR) and net revenue retention (NRR) faced temporary headwinds from contracts with deferred start dates.
Needham analyst Mike Cikos reiterated a Buy rating on Nutanix on Thursday but trimmed his price forecast to $80 from $92, citing near-term valuation pressure while maintaining confidence in the company’s long-term trajectory.
Also Read: Nutanix Stock Slides After Q4 Earnings Report
In his note to investors, he pointed to Nutanix’s strong execution, broadening ecosystem partnerships with Cisco (NASDAQ:CSCO), Dell (NYSE:DELL), and Pure Storage (NYSE:PSTG), as well as early adoption of its Nutanix Cloud Infrastructure (NCI) Compute platform as key growth catalysts.
Fiscal 2025 closed on a strong note, with Nutanix demonstrating execution against large strategic opportunities while building momentum for fiscal 2026, Cikos noted, adding that the company remains well-positioned to capture market share following Broadcom’s (NASDAQ:AVGO) acquisition of VMware, which has prompted enterprise customers to explore alternatives.
Since its April 2025 launch, Nutanix’s NCI Compute platform has gained early traction, with Dell PowerFlex already integrated and Pure Storage support expected by year-end. Cikos views the platform as a significant driver of revenue, margin expansion, and free cash flow in the coming years.
Cikos said, “We believe ongoing execution given the enhanced product offering paired with the scaling go-to-market partnerships and share-shift from VMware can drive shares higher.”
For fiscal 2026, management projected revenue between $2.90 billion and $2.94 billion, operating margins of 21%–22%, and free cash flow of $790–$830 million. Needham’s estimates sit near the midpoint of those ranges, with revenue at $2.92 billion and free cash flow at $792.8 million. Cikos described management’s forecast for a 28% free cash flow margin as conservative.
In the first quarter of fiscal 2026, Nutanix expects revenue of $670–$680 million, operating margins of 19.5%–20.5%, and earnings per share of 37 cents on roughly 296 million shares outstanding. The company anticipates adding several hundred new customers per quarter while continuing to grow renewal ACV and expand partner-led revenue contributions.
Despite lowering his price forecast, Cikos emphasized Nutanix’s ability to sustain durable growth through deepened partnerships, broader adoption of its cloud infrastructure platform, and rising opportunities in AI-driven and hybrid cloud environments.
Price Action: NTNX stock is trading lower by 5.91% to $65.49 at last check Thursday.
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Latest Ratings for NTNX
Date | Firm | Action | From | To |
|---|---|---|---|---|
Mar 2022 | Wells Fargo | Maintains | Equal-Weight | |
Mar 2022 | Needham | Maintains | Buy | |
Jan 2022 | Morgan Stanley | Maintains | Equal-Weight |
View More Analyst Ratings for NTNX
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This article Nutanix Poised To Capture Market Share With Expanding Cloud Platform And VMware Disruption: Analyst originally appeared on Benzinga.com
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