Key Takeaways
- Citi cut its Nebius price target to $265 from $324 on Nov. 4 and kept its Buy rating, a target 87% above the stock’s price.
- Nebius is down 51% from its June high after months of stock sales, new debt and worries about how neoclouds will fund their growth.
- Citi’s target needs only about Nebius’s usual sales multiple, but analysts have made their 2027 loss estimate bigger even as they raised their revenue estimate.
- The target looks too optimistic for the next 12 months, and the third-quarter report on Nov. 12 is the next chance for Nebius to change that.
Nebius Group (NBIS) has lost 51% since its June 18 closing high, and now Citi has lowered the bar too. On Nov. 4, analyst Tyler Radke cut his price target to $265 from $324 and kept his Buy rating, a call for 87% upside from Wednesday’s close of $141.52. The stock fell 6.7% that day.
Debt, Dilution and a Musk Warning
Nebius has been raising money fast. It sold $2.8 billion of stock in the second quarter at an average of $224 a share, then raised $5.75 billion of convertible notes in August, up from the $4.5 billion it first proposed.
On Oct. 22, it added a $3.5 billion secured facility from Citi. It matures in 364 days and starts at Term SOFR plus 2.75%, rising to as much as SOFR plus 3.50%, its release says.
Then the group took two hits. On Oct. 25, Elon Musk posted on X that “the 200+ neoclouds are going to see guppy-level death and consolidation.” In the same post, he said SpaceX had closed $40 billion of debt for GPUs. And on Oct. 28, Microsoft reported $45.2 billion of quarterly capital spending, short of the $50.7 billion analysts expected, and said some third-party capacity deliveries had slipped. Microsoft’s contract with Nebius is worth $17.4 billion to $19.4 billion.
Citi Still Sees a Near-Double
Radke made the cut ahead of Nebius’s third-quarter report. When he raised his target to $324 from $278 in August, Citi’s case was that capacity, not demand, was what held Nebius back.
Even after the cut, $265 sits just 6% below the Street’s average target.
Does $265 Add Up?
Analysts have barely trimmed their targets even as the stock halved:
The average was $281 on Oct. 21, up from $156 a year earlier, with targets from $84 to $410.
Analysts expect revenue to more than triple next year:
They’ve raised their 2027 revenue estimate 7% since June 30. But since early August, they’ve deepened their 2027 loss estimate to $6.16 a share from $4.87. They expect $6.2 billion of depreciation in 2027, nearly all of the $6.5 billion of EBITDA they forecast, before a dollar of interest.
On sales, the stock looks cheap against its own history:
Nebius traded at 5.4x forward sales at Wednesday’s close, about half its five-year average of 11x. That history includes the old Yandex business and a trading halt, so the average is a loose guide. At $265, Nebius would trade at about 10x.
TIKR Tracks 23 Analysts on Nebius. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nebius, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nebius’s Analyst Ratings
I’d Want to See Nebius’s Losses Shrink First
The risk is the bill for the build. Analysts expect $29.1 billion of capital spending in 2027 and net debt of about $34 billion by the end of that year.
So I think Citi’s target is too optimistic for the next 12 months. Citi only needs an ordinary sales multiple, but I don’t see the market paying it while each new loss estimate comes in bigger than the last, and I’d expect new shares to pay for some of that spending.
Nebius reports before the market opens on Thursday, Nov. 12. If annualized run-rate revenue has moved well past June’s $3.0 billion toward the $7 billion to $9 billion management guides for year-end, and the company shows a path to margins that cover depreciation, I’d give $265 a much better shot.
So What Is Nebius Stock Actually Worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Nebius could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
