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Does Nutanix's (NASDAQ:NTNX) Share Price Gain of 90% Match Its Business Performance?

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Nutanix, Inc. (NASDAQ:NTNX) shareholders might be concerned after seeing the share price drop 13% in the last quarter. But that fact in itself shouldn't obscure what are quite decent returns over the last year. After all, the stock has performed better than the market's return of (75%) over the last year, and is up 90%.

See our latest analysis for Nutanix

Given that Nutanix didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Nutanix grew its revenue by 4.5% last year. That's not a very high growth rate considering it doesn't make profits. In keeping with the revenue growth, the share price gained 90% in that time. That's not a standout result, but it is solid - much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

Nutanix is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Nutanix in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Nutanix shareholders have gained 90% (in total) over the last year. That certainly beats the loss of about 13% per year over three years. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Nutanix (at least 1 which is significant) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.

This article by Simply Wall St is general in nature. 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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