Nutanix Stock Soars as Full-Year Outlook Raises

Nutanix (ticker: NTNX) experienced a surge in stock prices on Friday following the announcement of an improved full-year outlook in response to strong demand for its cloud-computing services.

Raised Full-Year Revenue Projection

After market close on Thursday, Nutanix revealed that it now expects full-year revenue to range between $2.09 billion and $2.12 billion, surpassing its previous projection of $1.84 billion to $1.85 billion. The consensus estimate on Wall Street, according to FactSet, was $2.07 billion.

Impressive Fourth-Quarter Performance

In addition to the optimistic outlook, Nutanix reported earnings of 24 cents per share for its fiscal fourth quarter, with revenue amounting to $494.2 million. Analysts surveyed by FactSet had anticipated earnings of 16 cents per share from revenue of $475.2 million. Notably, the company generated free cash flow of $45.4 million, exceeding the Wall Street expectation of a $24.6 million loss.

Subscription Model Success

Chief Executive Rajiv Ramaswami attributed the company's consistent execution against a volatile macroeconomic backdrop to the advantages of Nutanix's subscription model. This operational achievement is reflected in the positive market response and increased investor confidence.

Analyst Recommendations

RBC Capital Markets analyst Matthew Hedberg reacted to the news by raising his price target for Nutanix shares to $43 from $38 and maintaining an Outperform rating. Similarly, KeyBanc Capital Markets analyst Thomas Blakey upped his price target to $45 from $35 while maintaining an Overweight rating. Both analysts emphasized the company's strong performance and highlighted the value proposition of Nutanix's offerings.

Market Performance

Nutanix stock rallied on the back of these positive developments, with shares trading 14% higher on Friday at $35.32. If this upward trajectory is sustained throughout the day, it will mark the stock's highest closing price since November 2021. So far this year, Nutanix stock has gained 36% in value.

In summary, Nutanix's upgraded full-year outlook, impressive financial results, and robust subscription model have contributed to an upward trend in its stock price, resulting in increased price target projections from analysts.