It would be an understatement to say Nutanix (NASDAQ:NTNX) shareholders endured a roller coaster ride in 2019. After plummeting more than 60% from the start of the year through mid-August, shares of the enterprise cloud platform provider have recovered somewhat, and now trade at nearly twice last year's low. That is, however, still more than 40% below their 52-week high.

One primary impetus for that initial drop was Nutanix's ongoing shift away from a hardware/appliance-based sales model, and toward a cloud-based subscription approach.

Last quarter was the company's fifth since it began that transition, which initially created a significant headwind to top-line growth given differences in monthly revenue-recognition requirements between the two business models.

But that also raises the question: Is Nutanix still worth buying in the wake of its recent rise? I think so.

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We've seen this movie before

For one thing, Nutanix appears to be following in the footsteps of Adobe Systems (NASDAQ:ADBE), which all but completed a strikingly similar transition half a decade ago.

Indeed, while many investors worried it was too late to buy Adobe in mid-2014 after shares rallied on the momentum of its cloud-based subscription offerings, I argued the creative software specialist was still worth considering for patient, long-term investors. Shares of the creative software specialist have soared by more than 360% since then.

Nutanix today is at an earlier stage of its metamorphosis than Adobe was in 2014: Specifically, it has yet to reach the point where the company's subscription momentum reveals the true strength of its underlying business. To be sure, while Nutanix's latest (fiscal first-quarter 2020) results handily beat expectations and helped the stock rally almost 28% in November alone, its headline numbers still aren't dropping any jaws. Quarterly revenue rose a modest 0.5% year over year to $314.8 million (swinging from a slight decline the previous quarter), which translated to an adjusted net loss of $0.71 per share. 

But it won't be long until that revenue growth manifests itself in the form of accelerated bottom-line growth on Nutanix's statements of operations. Nutanix management noted during the subsequent conference call that 69% of total revenue and 73% of total billings came from subscriptions last quarter. This puts the company well on track to reach its goal of getting more than 75% of total billings from subscriptions by the end of this fiscal year. 

Of course, the differences between Nutanix now and Adobe circa 2014 are significant -- particularly as Adobe enjoyed the advantage of consistent profitability leading into its transition. Nutanix, by contrast, has yet to achieve sustained profitability on a GAAP basis -- which, to be fair, isn't terribly uncommon among earlier-stage tech companies that are still investing heavily in innovation, revenue growth, and market share gains.

And for what it's worth, the Adobe-Nutanix connection isn't entirely coincidental: Dheeraj Pandey, Nutanix's founder, chairman, and CEO, was named to Adobe's board of directors almost exactly a year ago. And we can be sure he's benefited from having a front-row seat as Adobe's meteoric, subscription-fueled rise continues to play out.

For opportunistic investors who expect that Nutanix will follow suit, an investment in its stock now could deliver market-crushing gains for years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.