Morgan Stanley on Nutanix (NTNX.US): FY26 Q4 Results — Supply Chain Issues May Persist, but Execution Is Strong
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Morgan Stanley maintains Equal-weight on Nutanix (NTNX.US) after FY26 fourth-quarter results (fiscal year ended July 2026) but raises the target price from $55 to $63, priced on roughly 18x (previously 16x) CY27 free cash flow of $1.013bn. Q4 revenue of $757mn accelerated to +16% YoY (Q3: +10%, including about 260bps of base effects), beating consensus by 2.6% versus an average 1.2% beat over the prior four quarters. Net new ARR grew 37%—the fastest in several years—with cRPO up 28% and cRPO orders up 22%. FY27 revenue guidance of $3.18–3.23bn (midpoint implying +12%) matches consensus of $3.199bn and assumes server supply-chain issues persist and the environment worsens; the analyst expects the company to exceed it as the year progresses. Potential upside comes from storage-ecosystem OEM partnerships with Dell, EverPure and NetApp fully ramping in FY27, plus NC2 cloud demand. The main risk is free-cash-flow margin: savings from the announced 5% workforce reduction will be reinvested and payment terms are becoming more flexible. Bull and bear cases were raised to $103 and $31, respectively. Turning more constructive requires a path to faster overall growth, likely needing server supply normalization and several more quarters; the stock traded at $65.39 on August 26, 2026.
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