Shares of Nutanix (NASDAQ: NTNX) closed just under $48 last week, continuing to extend what’s turning into a frustrating end to the year for investors. The software company is down about 40% from its September highs and more than 20% over the past three weeks alone.
While it could be argued that Nutanix never fully found its footing in 2025, the most recent drop followed an earnings report that spooked rather than calmed the market and accelerated selling pressure. Although the pullback had some justification, the setup for the final weeks of the year offers a favorable risk/reward balance.
Dodgy Earnings and an Excessive Reaction
The latest sell-off was triggered by Nutanix’s late November earnings report, which delivered a combination that investors are never going to be excited about: a revenue miss and a reduction to forward guidance. At first glance, that’s always going to result in fresh selling pressure, no matter how much the stock has already dropped.
However, the details matter, and there were some mitigating circumstances. Management flagged that many of their deals closed late in the quarter and had future start dates, pushing revenue recognition out of the period. This dynamic reduced reported revenue and contributed to the miss on expectations, but did not impact free cash flow, which remained intact. In simple terms, business was done, but the timing hurt the optics.
The stock gapped down the following day and didn’t stop selling until it was 20% below its pre-earnings price and back at the same levels where it started last year. Considering it was still the company’s best-ever quarter from a revenue booked perspective, you can’t help but feel the drop was excessive.
Improving Technical Setup
From a technical perspective, the setup is also interesting for all the right reasons, and the first thing to note is what has not happened since early December. That is, after setting a low in the first few days of the month, the bears have been unable to send Nutanix any lower. Every day that goes by without them being able to do so suggests that they’re losing control to the bulls.
Several technical indicators also support the idea that selling pressure has reached exhaustion levels: not only is the stock's Relative Strength Index now moving up from extremely oversold levels, but its MACD just had a bullish crossover.
These indicators, especially when they flash green together like this, lend support to the argument that the stock is now in pre-rally consolidation mode. For investors looking for a bargain ahead of the holiday season, this is exactly the kind of setup that sticks out.
Analysts Remain Bullish
The final thing to note is that despite the headline miss and weaker-than-expected forward guidance, analyst support has remained bullish. The team at Needham, for example, reiterated its Buy rating following the report, trimming its price target to $65 while maintaining its view that revenue timing, not demand, drove the miss.
Morgan Stanley echoed this, maintaining its Overweight rating and setting a fresh price target of $82, which points to a targeted upside of some 70%—not bad for a stock that just delivered a dodgy earnings report.
The common thread across bullish commentary is that Nutanix’s demand trends have not cracked. Analysts broadly see deferred start dates, revenue recognition timing nuances, and customer migration schedules as short-term accounting headwinds rather than structural issues that warrant avoiding this stock.
What to Expect for the Rest of the Month
If Nutanix can continue to consolidate through this week, while momentum continues to lean towards the bulls, don’t be surprised if there’s a late-stage rally into the holidays.
If the bears were going to take the stock any lower, they’d have done so—with the company’s revenue engines still ticking over nicely and analysts continuing to back it, we could be looking at the best comeback trade left in 2025.
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The article "Is Nutanix the Best Comeback Trade Left in 2025? The Setup Says Yes" first appeared on MarketBeat.
