Nutanix (NASDAQ:NTNX) investors are sitting on a loss of 47% if they invested a year ago – Simply Wall St
Nutanix, Inc. (NASDAQ:NTNX) shareholders will doubtless be very grateful to see the share price up 59% in the last quarter. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 47% in a year, falling short of the returns you could get by investing in an index fund.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
Though if you're not interested in researching what drove NTNX's performance, we have a free list of interesting investing ideas to potentially inspire your next investment!
Nutanix wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Nutanix grew its revenue by 13% over the last year. That's not a very high growth rate considering it doesn't make profits. Given this fairly low revenue growth (and lack of profits), it's not particularly surprising to see the stock down 47% in a year. It's important not to lose sight of the fact that profitless companies must grow. But if you buy a loss making company then you could become a loss making investor.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Nutanix is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Nutanix stock, you should check out this free report showing analyst consensus estimates for future profits.
We regret to report that Nutanix shareholders are down 47% for the year. Unfortunately, that's worse than the broader market decline of 16%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 1.2%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Nutanix better, we need to consider many other factors. For instance, we've identified 3 warning signs for Nutanix (1 shouldn't be ignored) that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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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