Last Update 20 Mar 26

Fair value Decreased 4.38%

NTNX: AMD AI Partnership And VMware Migrations Will Support Future Upside

The analyst price target for Nutanix has been trimmed by a few dollars, reflecting a slightly lower fair value estimate of $56.29. Analysts are balancing supply related revenue timing issues with solid bookings trends, strong customer additions, and growing contributions from OEM and AMD partnerships.

Analyst Commentary

Recent research updates on Nutanix reflect a mix of optimism about long-term growth drivers and caution around nearer term revenue visibility and supply related constraints. Here is how the Street is framing the setup.

Bullish Takeaways

Bullish analysts point to "solid" recent quarters, with revenue coming in slightly ahead of expectations and bookings forecasts raised, which they view as supportive of Nutanix's ability to execute on its current plan.
Several firms highlight mid teens growth in total contract value bookings and double digit year over year gains in annual recurring revenue and cRPO as evidence that underlying demand trends and customer adoption remain healthy, even as reported revenue timing is affected.
The highest net new customer additions in eight years, combined with what some view as only partial penetration of VMware migration opportunities, are being framed as a sign that Nutanix still has room to expand its footprint with existing and new customers.
Partnerships with OEMs and AMD, including a US$250m investment tied to an edge inference solution and a new agentic AI partnership, are viewed as supportive of the business model and as potential supports to valuation over time.

Bearish Takeaways

Bearish analysts are trimming price targets and pointing to weaker revenue visibility, with repeated references to server supply constraints and timing issues that delay revenue recognition and lead to cuts in revenue and free cash flow outlooks.
Some highlight that fiscal year sales guidance has been reduced again and describe FY26 as weaker because of delayed project starts, which they see as a risk for investors who prioritize near term growth trajectories.
Equal Weight and downgraded ratings emphasize that, at Nutanix's current revenue scale, visibility into top line growth heading into calendar 2026 is diminishing. This tempers enthusiasm around execution risk and future growth consistency.
Several target cuts cite concerns that supply chain issues and OEM channel constraints could continue to push revenue into later periods, creating ongoing uncertainty around how quickly bookings convert into reported revenue and cash flow.

What's in the News

Nutanix announced the Nutanix Agentic AI solution, a full software stack designed to help enterprises run agentic AI workloads at scale, integrating with NVIDIA AI Enterprise and the NVIDIA Agent Toolkit to support AI factories, Models-as-a-Service, and Kubernetes based AI tools (Key Developments).
The Nutanix Agentic AI solution is built on the NVIDIA AI Data Platform reference design and includes Nutanix Unified Storage, AHV hypervisor optimizations for GPU dense servers, and networking features using NVIDIA BlueField to focus on performance, security, and predictable token costs (Key Developments).
AMD and Nutanix entered a multi year partnership to develop an open, full stack AI infrastructure platform for agentic AI applications across data center, hybrid, and edge environments, with AMD planning a US$150m equity investment in Nutanix and up to US$100m in funding for joint engineering and go to market work, subject to approvals (Key Developments).
Nutanix expects third quarter fiscal 2026 revenue of US$680m to US$690m and full year fiscal 2026 revenue of US$2.80b to US$2.84b, providing investors with a reference point for upcoming results (Key Developments).
Ark Data Centers achieved Champion Elevate Service Provider Partner status with Nutanix, signaling deeper alignment around disaster recovery, storage, and operations for mid market and enterprise customers using the Nutanix portfolio (Key Developments).

Valuation Changes

Fair Value: trimmed from $58.87 to $56.29, a modest reduction in the modeled equity value per share.
Discount Rate: adjusted slightly from 8.88% to 8.87%, indicating a nearly unchanged risk assumption in the model.
Revenue Growth: kept effectively stable at around 12.83%, with only an immaterial recalibration in the underlying forecast.
Net Profit Margin: held steady at roughly 14.13%, reflecting no material change in longer term profitability assumptions.
Future P/E: reduced from 36.25x to 34.12x, suggesting a slightly lower valuation multiple being applied to Nutanix's expected earnings.

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Key Takeaways

Strategic partnerships, AI-driven innovation, and platform differentiation position Nutanix for expanded market share as enterprise cloud adoption accelerates.
Recurring revenue growth, longer contracts, and leading margins enhance Nutanix's financial predictability and long-term profitability.
Intensifying competition from public cloud and IT vendors, rising costs, and customer concentration threaten Nutanix's revenue growth, profitability, and long-term differentiation.

Catalysts

About Nutanix

Provides an enterprise cloud platform in North America, Europe, the Asia Pacific, the Middle East, Latin America, and Africa.What are the underlying business or industry changes driving this perspective?

Accelerating adoption of hybrid and multi-cloud architectures, highlighted by new integrations with Google Cloud and deepening partnerships with AWS, Azure, Dell, and Pure Storage, positions Nutanix to capture a broader share of enterprise infrastructure modernization budgets, expanding its addressable market and driving sustained revenue growth.
Ongoing enterprise digital transformation and demand for scalable solutions, as evidenced by large multi-year deals, major wins like Finanz Informatik, and increasing contributions from Global 2000 customers, provide a robust pipeline for future "land and expand" motions, improving both revenue visibility and opportunities for net new ARR expansion.
Innovation in AI-driven and software-defined offerings-including enhanced AI capabilities (GPT-in-a-Box 2.0, Nutanix Enterprise AI), support for external storage, and integrated container management-differentiates the platform in an increasingly data
and automation-focused environment, paving the way for higher gross margins and long-term margin expansion.
The ongoing shift to a subscription-based recurring revenue model, rising average contract duration, strong net retention (NRR), and industry-leading gross margins all contribute to improved predictability of earnings and financial stability, increasing long-term profitability.
Continued industry migration from legacy infrastructure toward hyperconverged and software-defined solutions-combined with Nutanix's recognition as a leader in hybrid and multi-cloud and container management by Gartner and Forrester-reinforces Nutanix's strategic positioning and suggests significant room for future revenue growth and market share gains as secular adoption accelerates.

Nutanix Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Nutanix's revenue will grow by 12.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 9.9% today to 14.1% in 3 years time.
Analysts expect earnings to reach $544.9 million (and earnings per share of $1.61) by about March 2029, up from $267.1 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $853.7 million in earnings, and the most bearish expecting $397.9 million.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 34.2x on those 2029 earnings, down from 40.7x today. This future PE is greater than the current PE for the US Software industry at 29.0x.
Analysts expect the number of shares outstanding to decline by 1.07% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.87%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Ongoing shift of enterprise IT workloads to hyperscale public cloud vendors (e.g., AWS, Azure, Google Cloud) may slow demand for Nutanix's hyper-converged infrastructure, reducing long-term revenue growth potential as public cloud outpaces private/hybrid deployments.
Persistent customer concentration in solutions like Dell PowerFlex and other large enterprise deals exposes Nutanix to revenue instability; significant losses, delayed renewals, or renegotiations with these large clients could materially impact top-line growth and earnings predictability.
Slowing growth in net retention rate (NRR) and expanding average initial deal size signals that future expansion within existing customers may become more challenging, undermining ARR growth and future net margin scalability.
Elevated and rising operating expenses-including delayed headcount additions, increased SG&A, and continuing R&D investments to maintain product leadership-may compress margins and limit improvements in profitability over the next several years.
Industry-wide pricing pressure driven by intensifying competition from established IT vendors, public cloud providers, and the risk of commoditization in hyper-converged infrastructure software could erode Nutanix's differentiation, reduce average selling prices, and put long-term pressure on both revenue and earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $56.29 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.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $3.9 billion, earnings will come to $544.9 million, and it would be trading on a PE ratio of 34.2x, assuming you use a discount rate of 8.9%.
Given the current share price of $41.03, the analyst price target of $56.29 is 27.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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