Returns Breakdown
| Return on Investment | (82.83) | |
| Return on Assets | (0.43) | |
| Return on Equity | (1.84) | |
| Return Capital | (0.74) | |
| Return on Sales | (0.62) |
Are Nutanix (NASDAQ:NTNX) investors starting to hold back?
 | By Rifka Kats | Macroaxis Story |
Nutanix Revenue to Assets are fairly stable at the moment as compared to the past year. Nutanix reported Revenue to Assets of 0.80 in 2019. Asset Turnover is likely to rise to 0.78 in 2020, whereas Net Income Per Employee is likely to drop (113 K) in 2020. This short post will break down Nutanix as a possible investment alternative for your portfolios. We will provide a perspective on Nutanix future direction.
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Reviewed by Ellen Johnson
The company has a beta of 0.4626. Let's try to break down what Nutanix's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Nutanix will likely underperform. The beta indicator helps investors understand whether Nutanix moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Nutanix deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Nutanix. Your research has to be compared to or analyzed against Nutanix's peers to derive any actionable benefits. When done correctly, Nutanix's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Nutanix.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Nutanix. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Nutanix
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Nutanix's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Nutanix's Liquidity
Nutanix financial leverage refers to using borrowed capital as a funding source to finance Nutanix ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nutanix financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Nutanix's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Nutanix's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Nutanix's total debt and its cash.
Nutanix Gross Profit
Nutanix Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Nutanix previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Nutanix Gross Profit growth over the last 10 years. Please check Nutanix's gross profit and other fundamental indicators for more details.
Breaking it down a bit more
Nutanix shows above-average downside volatility for the selected time horizon. We advise investors to inspect Nutanix further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Nutanix future alpha.
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