Nutanix Q1 Results Offset By Slowing Annual Recurring Revenue, Federal Vertical Weakness: Analysts
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 27 2024
0mins
Should l Buy NTNX?
Source: Benzinga
Nutanix Performance Overview: Nutanix, Inc. reported an 18% growth in annual recurring revenue and a 16% increase in overall revenue, prompting analysts to raise their price forecasts while noting a conservative outlook despite strong results and customer acquisition.
Challenges and Market Reactions: Despite adding 630 customers and a focus on small and medium businesses, the company experienced a slowdown in ARR growth and a decline in net revenue retention, leading to a 7.17% drop in share price to $67.18.
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Analyst Views on NTNX
Wall Street analysts forecast NTNX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NTNX is 70.42 USD with a low forecast of 53.00 USD and a high forecast of 90.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
12 Buy
2 Hold
0 Sell
Strong Buy
Current: 38.390
Low
53.00
Averages
70.42
High
90.00
Current: 38.390
Low
53.00
Averages
70.42
High
90.00
About NTNX
Nutanix, Inc. is engaged in cloud software, offering organizations a single platform for running apps and data across clouds. The Company’s Nutanix Cloud Platform is designed to enable organizations to build a hybrid multicloud infrastructure, providing a consistent cloud operating model with a single platform for running applications and managing data in core data centers, at the edge, and on public clouds, all while supporting a variety of hypervisors and container platforms. Nutanix Cloud Platform supports a variety of workloads with varied compute, storage, and network requirements, including business-critical applications, data platforms, general-purpose workloads, end user computing and virtual desktop infrastructure services, enterprise artificial intelligence (AI) workloads, and cloud native applications. Its solutions are primarily sold through its channel partners or original equipment manufacturers (OEMs) and delivered directly to its end customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Key Agreement Renewal: QSE renewed its enterprise agreement with India's Muthoot Group, covering approximately 14,000 user licenses, which reinforces its strategic presence in the highly regulated Indian financial services sector, showcasing trust from large institutions.
- South American Expansion: QSE entered the Brazilian market with a three-year security agreement supporting three government clients for about 4,500 user licenses, establishing its initial commercial footprint in the region and facilitating broader adoption of its platform services.
- Strengthened International Collaboration: By joining the Canadian Association of Defence and Security Industries, QSE enhances its position within Canada's defense ecosystem and prepares for participation in the World Defense Show 2026, further expanding its international market influence.
See More
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- Surging Market Demand: The hybrid cloud market reached $194 billion in 2026 as European enterprises rush to comply with stringent data laws, significantly increasing the demand for quantum security encryption technologies, positioning QSE as a key player in this transformation.
- Key Agreement Renewal: QSE renewed its enterprise agreement with India's Muthoot Group, covering approximately 14,000 user licenses, reinforcing its long-term strategy in the Indian financial services sector and enhancing market trust.
- South American Expansion: QSE signed a three-year security agreement with three Brazilian government clients for about 4,500 user licenses, marking its initial commercial footprint in the region and facilitating broader adoption of its services in the face of advancing quantum computing threats.
- Strengthened International Collaboration: By joining the Canadian Association of Defence and Security Industries, QSE enhances its position within Canada's defense ecosystem and prepares for participation in the World Defense Show 2026, further driving its international expansion efforts.
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- Pressure from Business Model Shifts: Macro strategists have noted that the rise of AI tools is replacing expensive SaaS platforms, leading to pricing pressures, slower renewals, and declining customer retention, prompting investors to rethink growth and value in the AI era.
See More
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- Rating Downgrade: Barclays analyst Tim Long downgraded Nutanix's stock from Overweight to Equal Weight on January 15, lowering the price target from $64 to $53, which still offers a 26% upside, reflecting cautious market sentiment regarding the company's future performance.
- Market Share Opportunity: The analyst noted that Nutanix is in the 'middle innings' of its opportunity to gain market share from VMware, but slowing growth could limit its ability to sustain rapid momentum, impacting investor confidence.
- Revenue Scale: Morgan Stanley analyst Sanjit Singh also downgraded Nutanix on January 12, reducing the price target from $82 to $62; despite the company achieving over $2.5 billion in revenue, declining visibility into future growth adds short-term uncertainty.
- Long-Term Outlook: Despite short-term challenges, analysts maintain a positive view on Nutanix's long-term growth prospects, believing the company's potential in the enterprise cloud platform space continues to attract investor interest.
See More
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- Securities Fraud Investigation: Pomerantz LLP is investigating Nutanix and its executives for potential securities fraud and other unlawful business practices, aiming to protect investor rights and possibly lead to a class action lawsuit.
- Disappointing Earnings Report: Nutanix's financial results for Q1 FY2026, released on November 25, 2025, revealed revenue near the lower end of prior guidance, indicating a shift in revenue from Q1 to future periods due to increased customer demand for flexible start dates.
- Revenue Projection Downgrade: Following the disappointing performance, Nutanix lowered its full-year revenue forecast from a range of $2.9 billion to $2.94 billion down to $2.82 billion to $2.86 billion, highlighting the challenges and shifts in market demand the company is facing.
- Significant Stock Price Drop: Following the earnings report, Nutanix's stock price plummeted by $10.43, or 17.8%, closing at $48.34 on November 26, 2025, reflecting market concerns regarding the company's future outlook.
See More
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- ReTo Eco-Solutions Update: On October 29, ReTo announced a five-to-one share combination, resulting in a 43% decline in stock price over the past month, with an RSI of 28.7 indicating potential for a short-term rebound.
- Eightco Holdings Buyback Plan: Eightco announced a share buyback program of up to $125 million on December 29, with management believing the current valuation is attractive; the stock has an RSI of 27.4 and has fallen about 20% in the past five days.
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