Apr. 10 at 3:11 PM
$NTNX - 1. DCF vs. Murphy’s valuation argument
Murphy argues NTNX trades at a “premium valuation” and that software multiples are compressing. That’s a sentiment argument, not a fundamentals argument.
What DCF actually says
DCF models for Nutanix (from independent analysts, not JPM) generally show:
- High visibility into subscription cash flows
- Expanding gross margins as hardware pass‑through continues to shrink
- Operating leverage from S&M efficiency
- Long-term FCF growth driven by ARR compounding
DCF sensitivity analyses show that Nutanix’s valuation is most sensitive to ARR growth and renewal rates, not to short-term multiple compression.
Bottom line:
Murphy’s valuation argument is macro-driven, not company-driven. DCF fundamentals do not indicate overvaluation unless you assume a dramatic slowdown in ARR — which Nutanix has not demonstrated.
