Nutanix, Inc. (NTNX) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001618732

P/B -19.42

P/E 58.87

P/S 4.96

Market Cap 12.98 Bn

ROIC (Qtr) 23.03

Div Yield % 0.00

Rev 1y % (Qtr) 13.47

Total Debt (Qtr) 1.48 Bn

Debt/Equity (Qtr) -2.21

About

Nutanix, Inc. (NTNX) is a leading enterprise cloud platform provider operating in the technology industry. The company offers a comprehensive suite of software solutions and cloud services, designed to power its customers' enterprise infrastructure. Since its inception in 2009, Nutanix has been a pioneer in the hyperconverged infrastructure (HCI) category, combining compute, storage, and networking into a single on-premises product. Nutanix's main business activities revolve around providing a comprehensive cloud platform that delivers a consistent...

Nutanix, Inc. (NTNX) is a leading enterprise cloud platform provider operating in the technology industry. The company offers a comprehensive suite of software solutions and cloud services, designed to power its customers' enterprise infrastructure. Since its inception in 2009, Nutanix has been a pioneer in the hyperconverged infrastructure (HCI) category, combining compute, storage, and networking into a single on-premises product.

Nutanix's main business activities revolve around providing a comprehensive cloud platform that delivers a consistent operating model across various environments, including edge, private, hybrid, and multicloud. The Nutanix Cloud Platform is built on a scale-out architecture, enterprise-grade data services, and infrastructure choice flexibility, enabling customers to standardize on the Nutanix Cloud Platform as a single cloud platform to run a wide variety of workloads.

The company generates revenue through the sale of its software solutions and cloud services, as well as through the sale of its Nutanix-branded NX series appliances. These appliances are manufactured by Super Micro Computer, Inc. (Supermicro) based on Nutanix's specifications. Nutanix's primary products and services include Nutanix Cloud Infrastructure (NCI), Nutanix Cloud Management (NCM), Nutanix Unified Storage (NUS), Nutanix Database Service (NDB), and Nutanix Cloud Clusters (NC2).

Nutanix competes in a highly competitive market, primarily with companies that sell software and hardware to build and operate private clouds, integrated systems, and standalone storage and servers. The company's main competitors include VMware, AWS, Google Cloud, Oracle Cloud, Microsoft Azure, and traditional IT systems vendors such as Dell, HPE, Hitachi, IBM, Lenovo, Pure Storage, NetApp, and Huawei. Nutanix's competitive advantages include its ability to provide a consistent cloud operating model across various environments, its scale-out architecture, enterprise-grade data services, and freedom of infrastructure choice.

Nutanix's customers come from a broad range of industries, including automotive, consumer goods, education, energy, financial services, healthcare, manufacturing, media, public sector, retail, technology, and telecommunications. The company has over 24,000 end customers, including approximately 1,020 Global 2000 enterprises.

The Nutanix product and service brand names include Nutanix Cloud Infrastructure (NCI), Nutanix Cloud Management (NCM), Nutanix Unified Storage (NUS), Nutanix Database Service (NDB), and Nutanix Cloud Clusters (NC2). These solutions are designed to simplify the complexities of multicloud environments, providing customers with the flexibility to choose the right cloud for each application.

In terms of growth strategy, Nutanix plans to continue to innovate and maintain technology leadership, invest in acquiring new end customers, drive follow-on sales to existing end customers, deepen engagement with current channel, OEM, cloud, and ecosystem partners, and balance growth against operating expenses. The company also plans to continue to invest in its research and development efforts and intends to grow its global research and development and engineering teams to enhance its solutions and broaden the range of IT infrastructure technologies that it converges into its enterprise cloud platform.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 856.53M provides robust 0.58x coverage of total debt 1.48B, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 780.42M provide 32.39x coverage of short-term debt 24.09M, demonstrating strong liquidity position and minimal refinancing risk.
Robust free cash flow of 772.76M exceeds capital expenditure of 83.77M by 9.22x, indicating strong organic growth funding capability.
Operating cash flow of 856.53M provides solid 0.61x coverage of current liabilities 1.40B, showing strong operational health.
Retained earnings of (4.87B) represent substantial 7.29x of equity (668.63M), indicating strong internal capital generation.

Cons

Operating cash flow of 856.53M barely covers its investment activities of (998.04M), with a coverage ratio of -0.86, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (998.04M) provide weak support for R&D spending of 750.35M, which is -1.33x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of 856.53M provides insufficient coverage of deferred revenue obligations of 2.17B, which is 0.39x, raising concerns about future service delivery capabilities.
The company's operating cash flow of 856.53M shows concerning coverage of stock compensation expenses of 340.60M, with a 2.51 ratio indicating potential earnings quality issues.
Operating earnings of 240.40M show weak coverage of depreciation charges of 103M, with a 2.33 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	4.12	2.56
EV to Cash from Ops.	15.99	38.32
EV to Debt	9.25	-11.37
EV to EBIT	56.97	-12.79
EV to EBITDA	46.01	7.72
EV to Free Cash Flow [EV/FCF]	17.72	24.22
EV to Market Cap	1.05	0.58
EV to Revenue	5.23	-35.00
Price to Book Value [P/B]	-19.42	3.74
Price to Earnings [P/E]	58.87	-18.61

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	0.00	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-16.25	-404.11
Cash and Equivalents Growth (1y) %	8.91	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	379.17	31.15
EBITDA Growth (1y) %	106.37	49.02
EBIT Growth (1y) %	549.23	25.85
EBT Growth (1y) %	549.23	17.82
EPS Growth (1y) %	341.18	70.69
FCF Growth (1y) %	25.21	295.45
Gross Profit Growth (1y) %	19.65	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.79	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.56	1.21
Current Ratio	1.89	2.57
Debt to Equity Ratio	-2.21	-0.93
Interest Cover Ratio	0.00	-13.15
Times Interest Earned	0.00	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	13.10	-544.82
EBIT Margin %	9.18	-197.78
EBT Margin %	9.18	-602.74
Gross Margin %	87.00	52.06
Net Profit Margin %	8.40	-605.52

Nutanix, Inc. (NASDAQ: NTNX)