Nutanix, Inc. (NASDAQ:NTNX) Could Be Less Than A Year Away From Profitability

We feel now is a pretty good time to analyse Nutanix, Inc.'s (NASDAQ:NTNX) business as it appears the company may be on the cusp of a considerable accomplishment. Nutanix, Inc. provides an enterprise cloud platform in North America, Europe, the Asia Pacific, the Middle East, Latin America, and Africa. The US$17b market-cap company’s loss lessened since it announced a US$125m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$79m, as it approaches breakeven. Many investors are wondering about the rate at which Nutanix will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Nutanix

Consensus from 15 of the American Software analysts is that Nutanix is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$56m in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 92%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Nutanix's growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Nutanix currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Nutanix, so if you are interested in understanding the company at a deeper level, take a look at Nutanix's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Valuation: What is Nutanix worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Nutanix is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Nutanix’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.