What happened

Shares of hybrid cloud-computing specialist Nutanix (NASDAQ:NTNX) rose 22.8% in May 2017, according to data from S&P Global Market Intelligence.

So what

First, Goldman Sachs analysts upgraded Nutanix to a buy based on falling share prices having created a "very attractive opportunity" to build a position in the stock. Shares jumped more than 14% on that analyst action.

Then the company followed through with a strong third-quarter earnings report. Nutanix shares gained another 11% on May 26, as revenue rose 67% year over year to $192 million and adjusted bottom-line losses stopped at $0.42 per share. Analysts had been looking for a larger net loss and less impressive revenue growth.

Data center full of modern server racks.

Image source: Getty Images.

Now what

I have been asking asking Nutanix to show me signs of a sustainable business model. The company is getting closer to delivering the evidence.

Earnings and cash flows remain soaked in red ink, but the company keeps building customer lists and revenue totals at a breathtaking pace. Moreover, the company keeps announcing partnerships with top-shelf IT industry names that should keep that growth moving for years to come.

Maybe it's time to start thinking about Nutanix as a growth stock with staying power rather than a questionable start-up. I'm still not close to starting a position in Nutanix today, but the company is moving in the right direction and your mileage may vary.