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NEXTracker, Inc. Class A (NXT)
NASDAQ:NXT
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NEXTracker, Inc. Class A
(NASDAQ:NXT)
79Outperform
Positive Factors
Financial Performance
Nextracker reported solid results, beating estimates for revenue and gross margin, and increased profit outlook due to better structural margins.
Guidance and Forecast
The company's FY'25 guidance was raised, indicating strong future performance expectations.
Market Position
Nextracker continues to be a leader in the tracker industry and benefits from secular growth in the US and globally.
Negative Factors
Market Competition
International business performance is better than expected, with a strong market position in regions like Europe despite competition from Chinese products.
Policy Uncertainty
Concerns exist that tracker average selling prices may start to decline and near-term solar capacity growth may slow due to policy uncertainty.
Pricing Concerns
There is concern that tracker ASPs may start to decline and near-term solar capacity growth may slow somewhat due to policy uncertainty.
NEXTracker, Inc. Class A (NXT) vs. S&P 500 (SPY)
Market Cap
$6.58B
Dividend YieldN/A
Average Volume (3M)2.12M
Price to Earnings (P/E)11.9
Beta (1Y)1.55
Revenue Growth21.46%
EPS Growth123.22%
CountryUS
Employees1,050
SectorTechnology
Sector Strength54
IndustrySolar
Share Statistics
EPS (TTM)3.79
Shares Outstanding143,710,200
10 Day Avg. Volume1,858,380
30 Day Avg. Volume2,115,139
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)N/A
Price to Sales (P/S)2.33
Price to Cash Flow (P/CF)11.20
P/FCF Ratio11.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$56.06Price Target Upside24.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
NEXTracker, Inc. Class A Business Overview & Revenue Model
Company DescriptionNEXTracker, Inc. Class A (NXT) is a leading global provider of solar tracker and energy storage solutions. Headquartered in California, the company specializes in designing and manufacturing advanced solar tracking systems that optimize the performance of large-scale solar power plants. NEXTracker's innovative products are engineered to increase energy production and efficiency, providing sustainable energy solutions across the globe.
How the Company Makes MoneyNEXTracker, Inc. generates revenue primarily through the sale of its solar tracking systems and related services. The company designs and manufactures solar trackers that allow solar panels to follow the sun's trajectory, maximizing energy capture and efficiency. Revenue streams include direct sales of these tracking systems to solar power developers and operators, as well as installation and maintenance services. NEXTracker may also engage in strategic partnerships with solar energy companies and EPC (Engineering, Procurement, and Construction) contractors, contributing to its earnings through collaborative projects and long-term service agreements. Additionally, the company might benefit from government incentives and policies that promote renewable energy adoption, indirectly supporting its financial performance.
NEXTracker, Inc. Class A Financial Statement Overview
Summary
NEXTracker, Inc. Class A shows strong financial performance with impressive revenue growth and profitability. The income statement reveals robust growth, while the balance sheet indicates low leverage and substantial returns on equity. Cash flow statements highlight strong liquidity and cash generation capabilities, though there is room for improvement in asset management.Income Statement
NEXTracker, Inc. Class A has shown impressive revenue growth, with a TTM revenue of $2.77 billion, up from $2.5 billion in the previous year, indicating a strong growth trajectory. The gross profit margin stands at 37.7%, and the net profit margin is at a solid 20.1%, reflecting efficient cost management and profitability. The EBIT margin of 25.8% and EBITDA margin of 26.9% further highlight operational efficiency. Overall, the income statement reflects strong growth and profitability within the renewable energy sector.85
Very Positive
Balance Sheet
The company's balance sheet shows a healthy equity position with stockholders' equity of $1.41 billion and a low debt-to-equity ratio of 0.005, indicating minimal leverage. Return on equity (ROE) is substantial at 39.7%, reflecting effective utilization of equity. However, the equity ratio is moderate at 47.1%, suggesting balanced funding between equity and liabilities. Overall, the balance sheet is strong with low leverage and high equity returns, though the equity ratio indicates room for improvement in asset management.72
Positive
Cash Flow
NEXTracker, Inc. Class A has demonstrated robust cash flow performance with a TTM operating cash flow of $526 million and free cash flow of $500 million, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.94, suggesting effective conversion of income to cash. The free cash flow to net income ratio is also favorable at 0.90. The free cash flow growth rate is impressive, highlighting efficient capital expenditure and cash management strategies. The cash flow statement reflects strong liquidity and cash generation capabilities.78
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.77B | 2.50B | 1.90B | 1.46B | 1.20B | 1.17B |
| Gross Profit | |||||
| 1.04B | 813.05M | 286.97M | 147.03M | 231.98M | 212.91M |
| EBIT | |||||
| 714.48M | 587.12M | 168.49M | 65.91M | 158.53M | 148.91M |
| EBITDA | |||||
| 745.16M | 591.48M | 174.55M | 76.31M | 175.34M | 166.85M |
| Net Income Common Stockholders | |||||
| 557.54M | 306.24M | 1.14M | 50.91M | 124.35M | 118.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 693.54M | 474.05M | 159.31M | 38.37M | 217.99M | 2.95M |
| Total Assets | |||||
| 2.98B | 2.52B | 1.42B | 1.02B | 880.97M | 619.16M |
| Total Debt | |||||
| 6.56M | 143.97M | 147.15M | 4.50M | 4.50M | 5.40M |
| Net Debt | |||||
| -686.98M | -330.09M | 17.14M | -24.57M | -186.09M | 2.45M |
| Total Liabilities | |||||
| 1.56B | 1.53B | 934.82M | 1.02B | 424.92M | 388.10M |
| Stockholders Equity | |||||
| 1.41B | 961.01M | -3.08B | -3.04M | 456.05M | 231.06M |
| Cash Flow | Free Cash Flow | ||||
| 499.59M | 422.31M | 104.49M | -153.03M | 91.31M | 239.34M |
| Operating Cash Flow | |||||
| 526.24M | 428.97M | 107.67M | -147.11M | 94.27M | 241.00M |
| Investing Cash Flow | |||||
| -171.33M | -6.66M | -3.16M | -5.75M | -2.96M | -1.66M |
| Financing Cash Flow | |||||
| -29.19M | -78.27M | -3.57M | -8.66M | 96.33M | -250.76M |
NEXTracker, Inc. Class A Technical Analysis
Negative
45.21
Price Trends
45.03
Negative
41.66
Positive
41.88
Positive
Market Momentum
-0.03
Negative
46.35
Neutral
39.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NXT, the sentiment is Negative. The current price of 45.21 is above the 20-day moving average (MA) of 44.01, above the 50-day MA of 45.03, and above the 200-day MA of 41.88, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 46.35 is Neutral, neither overbought nor oversold. The STOCH value of 39.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NXT.
NEXTracker, Inc. Class A Risk Analysis
NEXTracker, Inc. Class A disclosed 60 risk factors in its most recent earnings report. NEXTracker, Inc. Class A reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NEXTracker, Inc. Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $6.58B | 11.91 | 39.64% | ― | 21.46% | 123.22% | |
75 Outperform | $13.79B | 10.94 | 17.62% | ― | 26.75% | 55.24% | |
68 Neutral | $8.32B | 85.03 | 11.30% | ― | -41.92% | -76.24% | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% | |
53 Neutral | $657.78M | 18.37 | 1.34% | ― | -21.68% | -99.75% | |
51 Neutral | $1.02B | ― | -116.01% | ― | -68.86% | -4917.87% | |
46 Neutral | $1.48B | ― | -73.12% | ― | -9.83% | -71.44% |
* Technology Sector Average
Performance Comparison
NXT
NEXTracker, Inc. Class A
43.67
-14.35
-24.73%
CSIQ
Canadian Solar
9.94
-9.46
-48.76%
ENPH
Enphase Energy
60.15
-59.65
-49.79%
FSLR
First Solar
126.34
-41.11
-24.55%
SEDG
SolarEdge Technologies
16.10
-53.59
-76.90%
RUN
Sunrun
6.21
-6.89
-52.60%
NEXTracker, Inc. Class A Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: 14.11% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with significant revenue growth, record backlog, and improved profitability. Strategic investments and strong market position further bolster the company's outlook. However, there are challenges in international markets regarding pricing pressures, which could affect margin stability.Highlights
Revenue Growth
Revenue grew 15% year-over-year to approximately $2 billion year-to-date, with Q3 revenue at $679 million, marking a 7% sequential improvement over Q2.
Record Backlog
Backlog reached a new record, increasing quarter-over-quarter to significantly over $4.5 billion, more than doubling since the IPO two years ago.
Strong Adjusted EBITDA
Q3 adjusted EBITDA expanded to $186 million, marking an 11% increase year-over-year, with a margin of 27%, up 4 percentage points from the prior year.
Increased Profit Target
Raised fiscal '25 profit target by $75 million to a midpoint of $720 million.
Strategic Investments in R&D
Expanded R&D facilities in the U.S., Brazil, and India, and partnered with UC Berkeley with a $6.5 million commitment to advance solar technology.
Strong Balance Sheet
Closed Q3 with $694 million in total cash and $145 million in total debt, with no significant debt maturities until fiscal 2028, increasing total liquidity to $1.6 billion.
Lowlights
International Margin Pressure
International sales in markets like the Middle East require competitive pricing due to low-cost power generation, which could impact margin profiles.
Pricing and Cost Variability
Pricing and costs vary by region, customer, project size, etc., which adds complexity to cost management and pricing strategies.
Company Guidance
During Nextracker's third quarter fiscal year 2025 earnings call, the company reported strong financial metrics, with revenue growing 15% year-over-year to approximately $2 billion year-to-date, and Q3 revenue at $679 million. The adjusted EBITDA expanded to $186 million, marking an 11% increase year-over-year, with an adjusted EBITDA margin of 27%. The company's backlog reached a new record, exceeding $4.5 billion, providing excellent visibility and future growth confidence. The company raised its fiscal '25 profit target by $75 million to a midpoint of $720 million, driven by a robust demand profile with a book-to-bill ratio greater than 1 and record bookings in both U.S. and international regions. Nextracker's strategic investments in R&D and global expansion, including a partnership with UC Berkeley, were highlighted as key drivers of innovation and long-term value creation. Additionally, the company anticipates the solar industry to continue experiencing significant growth, supported by increasing electricity demand and advancements in solar power technology.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.