Evaluating Nutanix (NTNX): Is the Recent Pullback Revealing an Undervalued Opportunity?

Nutanix (NTNX) stock has seen some movement recently, prompting investors to reassess the company’s positioning and fundamentals. With returns shifting over the past month, many are keeping an eye on what might drive performance next.

See our latest analysis for Nutanix.

The recent pullback in Nutanix’s share price, especially the 12.88% decline over the past month, comes after a strong run earlier this year and has some investors recalibrating expectations. While short-term momentum has faded, the company’s long-term total shareholder returns remain robust, with a standout 152% gain over three years and 167% over five years.

If this kind of shift has you looking for what else the market is rewarding, now could be the perfect moment to discover fast growing stocks with high insider ownership

The recent volatility in Nutanix’s share price raises a key question for investors: is the current weakness revealing an undervalued opportunity, or is the market already reflecting all the company’s future growth prospects?

Most Popular Narrative: 22.3% Undervalued

With Nutanix shares recently closing at $67.66 and the most-followed narrative suggesting a fair value of $87.03, market sentiment diverges from consensus projections, creating a notable potential gap.

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. This expands its addressable market and supports revenue growth.

Read the complete narrative.

What drives this bold fair value? The answer lies in growth projections that focus on the company’s evolving platform and expansion strategy. Is revenue momentum or margin expansion the bigger catalyst behind the target price? Only the full narrative reveals which numbers make this valuation plausible.

Result: Fair Value of $87.03 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain if enterprise workloads shift more rapidly to hyperscale public clouds, or if customer concentration challenges undercut Nutanix’s future revenue momentum.

Find out about the key risks to this Nutanix narrative.

Another View: What Do Market Ratios Say?

While analyst targets suggest upside, Nutanix trades at a steep price-to-earnings ratio of 96.6 times earnings, well above both the US Software industry average of 34.9 and the peer average of 52.9. The fair ratio of 51.9 hints the market could eventually re-rate the stock lower, or is Nutanix’s growth story the exception?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Nutanix Narrative

If you prefer to dig into the details yourself or want to form your own perspective, you can craft a personal narrative in just a few minutes. So why not Do it your way?

A great starting point for your Nutanix research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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