Nutanix (NTNX) remains positioned to sustain its "durable" top-line growth even after a fiscal Q1 revenue miss and a lower fiscal 2026 revenue outlook, Morgan Stanley said in a Wednesday note.

The company reported fiscal Q1 adjusted earnings of $0.41 per diluted share late Tuesday, up from $0.36 a year earlier and in line with FactSet consensus analyst estimate, while revenue increased to $670.6 million from $591 million but below the FactSet consensus of $676.6 million. Nutanix cut its fiscal 2026 revenue guidance to between $2.82 billion and $2.86 billion, from $2.9 billion to $2.94 billion.

Nutanix management attributed the revenue miss and outlook cut to revenue recognition timing, given a higher mix of deals with deferred start dates and increased business with original equipment manufacturers, Morgan Stanley said.

The investment firm said Nutanix's 18% annual recurring revenue growth and 17% net-new ARR growth in fiscal Q1 were "impressive" given its deals with deferred revenue recognition. The company also reiterated its operating margin guidance and raised its free cash flow outlook for fiscal 2026, Morgan Stanley added.

Morgan Stanley cut its price target on Nutanix stock to $82 from $90, while maintaining its overweight rating.

Shares of Nutanix were down 17% in recent Wednesday trading.

Price: 48.76, Change: -10.01, Percent Change: -17.03