A class action lawsuit was filed against Nextracker Inc. (NXT) by Levi & Korsinsky on December 27, 2024. The plaintiffs (shareholders) alleged that they bought NXT stock at artificially inflated prices between February 1, 2024 and August 1, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Nextracker stock during that period can click here to learn about joining the lawsuit.
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Nextracker is a technology company that provides solar tracking solutions to optimize the energy production of utility-scale solar farms.
The company’s claims about the pace of project fulfillment due to industry-wide challenges and the ill effects of the delay on its financials are at the heart of the current complaint.
Nextracker’s Misleading Claims
According to the lawsuit, Nextracker and four of its senior officers and/or directors (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the extent to which project delays affected the company’s business from SEC filings and related material.
For instance, during an earnings call at the beginning of the Class Period, the CEO stated that the availability of solar panels increased meaningfully in the U.S. over the recent quarters. Hence, the company did not see panel availability as a first-order problem.
Furthermore, at the Bank of America Power, Utilities & Clean Energy Conference held on March 5, 2024, the CEO mentioned that Nextracker maintained a 30% annual compounded growth through its projection even for the current Fiscal Year.
Finally, during a May 14 earnings call, the CEO said that although headwinds could persist for any real customer or project, the total universe of projects had grown drastically, making the market growth consistently strong.
However, subsequent events (discussed below) revealed that the defendants wilfully misled investors about the pace of development of solar projects, which was actually harming the demand for Nextracker’s tracking solutions.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the Defendants are accused of misleading investors about the extent of delays in solar projects and the ill effects on the company’s business. The delayed projects were harming Nextracker’s ability to convert backlog into actual revenues at historical run rates.
The information became clear on August 1, 2024, when Nextracker announced the results for Q1 FY25 for the period ending June 30, 2024. During the related earnings call, the CEO admitted that the completion of projects was taking longer than expected owing to challenges such as construction permits or interconnection delays. Following the news, NXT stock fell 10.4% on August 2.
To conclude, the defendants allegedly misled investors about the headwinds impacting project completion and the related impact on Nextracker’s business and financial performance. In the past year, NXT stock has lost nearly 18%.
