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Nebius Slides Post-Earnings: A Long-Term Buy Opportunity?
NBISNebius Group N.V.(NBIS) MarketBeat·2025-02-25 19:41

Core Viewpoint - Nebius Group has experienced significant volatility in its stock price, with a recent decline of over 28% from its 52-week high, influenced by a market-wide sell-off and mixed analyst reactions to its Q4 and full-year 2024 financial results [2][3] Financial Performance - For Q4 2024, Nebius reported revenue of 37.9million,aremarkable46637.9 million, a remarkable 466% year-over-year increase, with its core AI infrastructure segment growing by 602% compared to Q4 2023 [3][4] - Despite the revenue surge, the company faced challenges with profitability, posting an adjusted EBITDA loss of 75.5 million, although this was a 7% improvement from the previous year's loss of 81.3million[4]−Thenetlossfromcontinuingoperationsincreasedto81.3 million [4] - The net loss from continuing operations increased to 136.6 million, a 55% rise year-over-year, while capital expenditures reached 417.6millioninQ4duetoheavyinvestmentsinGPUprocurementanddatacenterexpansion[4][5]−Forthefullyear2024,Nebiusachievedrevenueof417.6 million in Q4 due to heavy investments in GPU procurement and data center expansion [4][5] - For the full year 2024, Nebius achieved revenue of 117.5 million, a 462% increase from 2023, with an adjusted EBITDA loss of 266.4millionandanetlossof266.4 million and a net loss of 396.9 million [5] Future Guidance - Nebius provided ambitious guidance for 2025, projecting an annualized run-rate (ARR) of 220millionbyMarch,scalingtobetween220 million by March, scaling to between 750 million and 1billionbyDecember,withfull−yearrevenueexpectedtobebetween1 billion by December, with full-year revenue expected to be between 500 million and 700million[6]−Thecompanyaimsfornear−breakevenEBITDAbytheendof2025,supportedbyplanstoexpanddatacentercapacityto100megawatts,withpotentialscalingtoover300megawatts[6]AnalystSentiment−AnalystreactionstoNebius′sQ4earningsreportweremixed,withBWSFinancialmaintainingaBuyratingandraisingitspricetargetfrom700 million [6] - The company aims for near-breakeven EBITDA by the end of 2025, supported by plans to expand data center capacity to 100 megawatts, with potential scaling to over 300 megawatts [6] Analyst Sentiment - Analyst reactions to Nebius's Q4 earnings report were mixed, with BWS Financial maintaining a Buy rating and raising its price target from 51 to 60,citingstrongQ1guidanceandgrowthpotential[7]−Conversely,HedgeyeGlobalTechnologyreverseditsbullishstance,removingitslongpositionduetoperceivedmisalignmentinmanagement′svisionandlightguidance,contributingtosellingpressure[8][9]−DADavidsoninitiatedcoveragewithaBuyratinganda60, citing strong Q1 guidance and growth potential [7] - Conversely, Hedgeye Global Technology reversed its bullish stance, removing its long position due to perceived misalignment in management's vision and light guidance, contributing to selling pressure [8][9] - DA Davidson initiated coverage with a Buy rating and a 50 price target, recognizing Nebius as a potential alternative to hyperscaler-dominated AI compute [9] Long-Term Outlook - Despite recent stock pullbacks, there are optimistic long-term prospects for Nebius, driven by increasing demand for AI infrastructure and strong institutional backing, including investments from NVIDIA and other notable firms [10] - The company's guidance for a $1 billion ARR target by year-end indicates aggressive scaling intentions, with NVIDIA's upcoming earnings report expected to provide insights into the AI sector's health and potential benefits for Nebius [11]