Intrinsic value of Nutanix, Inc. - NTNX

Previous Close

$38.34

  Intrinsic Value

$4.83

stock screener

  Rating & Target

str. sell

-87%

Previous close

$38.34

 
Intrinsic value

$4.83

 
Up/down potential

-87%

 
Rating

str. sell

We calculate the intrinsic value of NTNX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 7.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.00
  15.80
  14.72
  13.75
  12.87
  12.09
  11.38
  10.74
  10.17
  9.65
  9.18
  8.77
  8.39
  8.05
  7.75
  7.47
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.78
  5.70
  5.63
  5.57
Revenue, $m
  1,351
  1,565
  1,795
  2,042
  2,305
  2,583
  2,877
  3,186
  3,510
  3,849
  4,203
  4,571
  4,954
  5,353
  5,768
  6,199
  6,647
  7,112
  7,596
  8,098
  8,621
  9,166
  9,732
  10,323
  10,937
  11,579
  12,247
  12,945
  13,674
  14,435
Variable operating expenses, $m
  1,054
  1,219
  1,396
  1,587
  1,789
  2,004
  2,230
  2,468
  2,718
  2,979
  3,238
  3,522
  3,817
  4,125
  4,444
  4,776
  5,121
  5,480
  5,852
  6,240
  6,643
  7,062
  7,499
  7,953
  8,427
  8,921
  9,436
  9,974
  10,535
  11,122
Fixed operating expenses, $m
  557
  569
  582
  595
  608
  621
  635
  649
  663
  677
  692
  708
  723
  739
  755
  772
  789
  806
  824
  842
  861
  880
  899
  919
  939
  960
  981
  1,002
  1,024
  1,047
Total operating expenses, $m
  1,611
  1,788
  1,978
  2,182
  2,397
  2,625
  2,865
  3,117
  3,381
  3,656
  3,930
  4,230
  4,540
  4,864
  5,199
  5,548
  5,910
  6,286
  6,676
  7,082
  7,504
  7,942
  8,398
  8,872
  9,366
  9,881
  10,417
  10,976
  11,559
  12,169
Operating income, $m
  -260
  -223
  -183
  -139
  -92
  -41
  12
  69
  129
  193
  272
  341
  414
  490
  568
  651
  737
  826
  919
  1,017
  1,118
  1,224
  1,335
  1,450
  1,571
  1,698
  1,830
  1,969
  2,114
  2,266
EBITDA, $m
  -220
  -179
  -134
  -85
  -33
  24
  83
  146
  213
  283
  356
  433
  513
  597
  684
  775
  869
  968
  1,071
  1,178
  1,290
  1,407
  1,529
  1,657
  1,790
  1,929
  2,075
  2,228
  2,387
  2,555
Interest expense (income), $m
  1
  23
  18
  28
  39
  51
  63
  77
  90
  105
  120
  136
  153
  171
  189
  208
  227
  248
  269
  291
  314
  337
  362
  388
  415
  442
  472
  502
  533
  566
  601
Earnings before tax, $m
  -283
  -242
  -211
  -179
  -143
  -105
  -64
  -21
  24
  72
  136
  188
  243
  301
  361
  424
  489
  557
  629
  703
  781
  862
  947
  1,036
  1,129
  1,226
  1,328
  1,435
  1,547
  1,665
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  7
  19
  37
  51
  66
  81
  97
  114
  132
  150
  170
  190
  211
  233
  256
  280
  305
  331
  359
  388
  418
  450
Net income, $m
  -283
  -242
  -211
  -179
  -143
  -105
  -64
  -21
  18
  53
  99
  137
  178
  220
  263
  309
  357
  407
  459
  513
  570
  629
  691
  756
  824
  895
  970
  1,048
  1,130
  1,216

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,315
  1,522
  1,746
  1,986
  2,242
  2,513
  2,799
  3,100
  3,415
  3,744
  4,088
  4,446
  4,819
  5,207
  5,611
  6,030
  6,465
  6,918
  7,389
  7,878
  8,387
  8,916
  9,467
  10,041
  10,640
  11,263
  11,914
  12,592
  13,301
  14,041
Adjusted assets (=assets-cash), $m
  1,315
  1,522
  1,746
  1,986
  2,242
  2,513
  2,799
  3,100
  3,415
  3,744
  4,088
  4,446
  4,819
  5,207
  5,611
  6,030
  6,465
  6,918
  7,389
  7,878
  8,387
  8,916
  9,467
  10,041
  10,640
  11,263
  11,914
  12,592
  13,301
  14,041
Revenue / Adjusted assets
  1.027
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
  1.028
Average production assets, $m
  135
  156
  180
  204
  230
  258
  288
  319
  351
  385
  420
  457
  495
  535
  577
  620
  665
  711
  760
  810
  862
  917
  973
  1,032
  1,094
  1,158
  1,225
  1,295
  1,367
  1,443
Working capital, $m
  -151
  -175
  -201
  -229
  -258
  -289
  -322
  -357
  -393
  -431
  -471
  -512
  -555
  -600
  -646
  -694
  -744
  -797
  -851
  -907
  -966
  -1,027
  -1,090
  -1,156
  -1,225
  -1,297
  -1,372
  -1,450
  -1,531
  -1,617
Total debt, $m
  340
  527
  728
  944
  1,174
  1,418
  1,676
  1,946
  2,230
  2,526
  2,836
  3,158
  3,494
  3,843
  4,206
  4,583
  4,975
  5,383
  5,806
  6,247
  6,705
  7,181
  7,677
  8,194
  8,732
  9,293
  9,879
  10,490
  11,128
  11,794
Total liabilities, $m
  1,183
  1,370
  1,572
  1,788
  2,018
  2,262
  2,519
  2,790
  3,073
  3,370
  3,679
  4,002
  4,337
  4,687
  5,050
  5,427
  5,819
  6,226
  6,650
  7,090
  7,548
  8,025
  8,521
  9,037
  9,576
  10,137
  10,722
  11,333
  11,971
  12,637
Total equity, $m
  131
  152
  175
  199
  224
  251
  280
  310
  341
  374
  409
  445
  482
  521
  561
  603
  647
  692
  739
  788
  839
  892
  947
  1,004
  1,064
  1,126
  1,191
  1,259
  1,330
  1,404
Total liabilities and equity, $m
  1,314
  1,522
  1,747
  1,987
  2,242
  2,513
  2,799
  3,100
  3,414
  3,744
  4,088
  4,447
  4,819
  5,208
  5,611
  6,030
  6,466
  6,918
  7,389
  7,878
  8,387
  8,917
  9,468
  10,041
  10,640
  11,263
  11,913
  12,592
  13,301
  14,041
Debt-to-equity ratio
  2.580
  3.460
  4.170
  4.750
  5.240
  5.640
  5.990
  6.280
  6.530
  6.750
  6.940
  7.100
  7.250
  7.380
  7.500
  7.600
  7.700
  7.780
  7.860
  7.930
  7.990
  8.050
  8.110
  8.160
  8.210
  8.250
  8.290
  8.330
  8.370
  8.400
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -283
  -242
  -211
  -179
  -143
  -105
  -64
  -21
  18
  53
  99
  137
  178
  220
  263
  309
  357
  407
  459
  513
  570
  629
  691
  756
  824
  895
  970
  1,048
  1,130
  1,216
Depreciation, amort., depletion, $m
  40
  45
  49
  54
  59
  65
  71
  77
  84
  90
  84
  91
  99
  107
  115
  124
  133
  142
  152
  162
  172
  183
  195
  206
  219
  232
  245
  259
  273
  289
Funds from operations, $m
  -243
  -197
  -162
  -124
  -84
  -40
  7
  56
  101
  143
  183
  229
  277
  327
  379
  433
  490
  549
  611
  675
  742
  813
  886
  963
  1,043
  1,127
  1,215
  1,307
  1,403
  1,504
Change in working capital, $m
  -22
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -63
  -66
  -69
  -72
  -75
  -78
  -82
  -85
Cash from operations, $m
  -221
  -173
  -136
  -97
  -54
  -9
  40
  91
  138
  181
  223
  270
  320
  371
  425
  481
  540
  601
  665
  731
  801
  874
  949
  1,029
  1,112
  1,199
  1,290
  1,385
  1,485
  1,589
Maintenance CAPEX, $m
  -23
  -27
  -31
  -36
  -41
  -46
  -52
  -58
  -64
  -70
  -77
  -84
  -91
  -99
  -107
  -115
  -124
  -133
  -142
  -152
  -162
  -172
  -183
  -195
  -206
  -219
  -232
  -245
  -259
  -273
New CAPEX, $m
  -20
  -21
  -23
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -48
  -50
  -52
  -54
  -57
  -59
  -61
  -64
  -67
  -70
  -73
  -76
Cash from investing activities, $m
  -43
  -48
  -54
  -61
  -67
  -74
  -81
  -89
  -96
  -104
  -112
  -121
  -129
  -139
  -148
  -158
  -169
  -180
  -190
  -202
  -214
  -226
  -240
  -254
  -267
  -283
  -299
  -315
  -332
  -349
Free cash flow, $m
  -264
  -222
  -191
  -157
  -121
  -83
  -41
  2
  41
  77
  110
  149
  190
  232
  277
  323
  371
  422
  474
  529
  587
  647
  709
  775
  844
  916
  991
  1,070
  1,153
  1,240
Issuance/(repayment) of debt, $m
  -90
  187
  202
  216
  230
  244
  257
  271
  284
  297
  309
  323
  336
  349
  363
  377
  392
  407
  423
  440
  458
  477
  496
  517
  538
  561
  585
  611
  638
  666
Issuance/(repurchase) of shares, $m
  564
  262
  234
  203
  169
  132
  93
  51
  14
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  474
  449
  436
  419
  399
  376
  350
  322
  298
  297
  309
  323
  336
  349
  363
  377
  392
  407
  423
  440
  458
  477
  496
  517
  538
  561
  585
  611
  638
  666
Total cash flow (excl. dividends), $m
  210
  228
  245
  261
  277
  293
  309
  324
  339
  373
  420
  472
  526
  582
  640
  700
  763
  829
  898
  970
  1,045
  1,123
  1,205
  1,292
  1,382
  1,477
  1,576
  1,681
  1,791
  1,906
Retained Cash Flow (-), $m
  -564
  -262
  -234
  -203
  -169
  -132
  -93
  -51
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -74
Prev. year cash balance distribution, $m
  476
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  122
  -35
  11
  59
  109
  161
  216
  273
  307
  340
  385
  436
  488
  543
  599
  658
  720
  784
  851
  921
  994
  1,070
  1,150
  1,234
  1,322
  1,415
  1,511
  1,613
  1,720
  1,832
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  117
  -32
  9
  48
  84
  117
  146
  170
  176
  178
  183
  186
  186
  182
  176
  167
  157
  144
  131
  117
  103
  89
  75
  63
  51
  41
  32
  25
  19
  14
Current shareholders' claim on cash, %
  50.0
  41.7
  36.1
  32.4
  29.8
  28.2
  27.2
  26.7
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6
  26.6

Nutanix, Inc. is a United States-based company, which provides an enterprise cloud platform that converges silos of server, virtualization and storage into an integrated solution. The Company's enterprise cloud platform connects to public cloud services. It has operations in the United States; Europe, the Middle East and Africa; Asia-Pacific, and Other Americas. Its solution consists of software product families, including Acropolis and Prism. Its solution is delivered on commodity x86 servers. Acropolis includes its Distributed Storage Fabric that delivers enterprise-grade data management features. Acropolis also includes a built-in hypervisor, and its Application Mobility Fabric that enables application placement, conversion and migration across various hypervisors, and between public and private clouds. Prism delivers integrated virtualization and infrastructure management, operational analytics and a suite of one-click administration capabilities.

FINANCIAL RATIOS  of  Nutanix, Inc. (NTNX)

Valuation Ratios
P/E Ratio -12.9
Price to Sales 7.7
Price to Book 27.3
Price to Tangible Book
Price to Cash Flow 423.5
Price to Free Cash Flow -164.7
Growth Rates
Sales Growth Rate 72.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 19%
Cap. Spend. - 3 Yr. Gr. Rate 21.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage -452
Management Effectiveness
Return On Assets -80.4%
Ret/ On Assets - 3 Yr. Avg. -66.7%
Return On Total Capital -408.9%
Ret/ On T. Cap. - 3 Yr. Avg. -343.8%
Return On Equity -606.6%
Return On Equity - 3 Yr. Avg. -1400.7%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 57.4%
Gross Margin - 3 Yr. Avg. 59%
EBITDA Margin -54%
EBITDA Margin - 3 Yr. Avg. -43.3%
Operating Margin -55.7%
Oper. Margin - 3 Yr. Avg. -47.4%
Pre-Tax Margin -59.1%
Pre-Tax Margin - 3 Yr. Avg. -49.4%
Net Profit Margin -59.7%
Net Profit Margin - 3 Yr. Avg. -50%
Effective Tax Rate -1.1%
Eff/ Tax Rate - 3 Yr. Avg. -1.2%
Payout Ratio 0%

NTNX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTNX stock intrinsic value calculation we used $1155 million for the last fiscal year's total revenue generated by Nutanix, Inc.. The default revenue input number comes from 0001 income statement of Nutanix, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NTNX stock valuation model: a) initial revenue growth rate of 17% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NTNX is calculated based on our internal credit rating of Nutanix, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Nutanix, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NTNX stock the variable cost ratio is equal to 78.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $545 million in the base year in the intrinsic value calculation for NTNX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Nutanix, Inc..

Corporate tax rate of 27% is the nominal tax rate for Nutanix, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NTNX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NTNX are equal to 10%.

Life of production assets of 3.2 years is the average useful life of capital assets used in Nutanix, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NTNX is equal to -11.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $326.779 million for Nutanix, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 182.127 million for Nutanix, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Nutanix, Inc. at the current share price and the inputted number of shares is $7.0 billion.

RELATED COMPANIES Price Int.Val. Rating
BR Broadridge Fin 103.33 76.34  sell

CONTACT US       ASSET ALLOCATION

About X-FIN       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2019. All rigths reserved.