Nutanix Stock (NASDAQ: NTNX) Outperforms into Earnings – The Street Expects

Nutanix's stock (NASDAQ: NTNX) has been a big outperformer this year, gaining 29.86% whilst the Nasdaq 100 has added just 2%. Markets are now looking to the firm's latest earnings, due after this afternoon's closing bell, with expectations on the rise. A conference call at 4:30pm EDT will follow the report.

Markets are projecting Nutanix to deliver earnings of $0.38 per share on revenue of approximately $626.75 million, marking a substantial year-over-year growth of about 35.71% in earnings and 19.5% in revenue compared to the prior-year quarter. This positive growth expectation has been a key driver behind recent bullish sentiment.

Nutanix has demonstrated revenue growth in line with industry trends, supporting its elevated price-to-sales (P/S) ratio of 9.5x. This is notably higher than the industry median, indicating that investors expect continued robust performance and possibly even acceleration in future quarters.

Historically, Nutanix shares exhibit significant volatility around earnings announcements, with a positive one-day return in 60% of past earnings events. The median positive return is 9.9%, with a maximum of 29.2%, underscoring the sensitivity of NTNX’s price to earnings surprises.

Technical analysis reveals a compelling picture: NTNX trades well above both its 50-day ($70.40) and 200-day ($65.74) simple moving averages, underscoring strong bullish momentum. The 14-day relative strength index (RSI) stands at 67.68, approaching overbought territory but still supportive of the current uptrend.

Analysts remain optimistic about Nutanix’s near-term prospects. The consensus one-year price target stands at $89.05, suggesting further upside from current levels. Full-year earnings are forecast at $1.62 per share on revenue of $2.51 billion, representing annual growth rates of 23.66% and 16.82%, respectively.

However, the company’s high valuation has sparked debate. While recent growth justifies optimism, Nutanix’s elevated multiples mean that future results must meet or exceed expectations to sustain the current momentum.

Despite the bullish backdrop, there are risks. The high P/S ratio could make the stock vulnerable to disappointment if revenue or earnings growth slows.