Nextracker (NXT)
A Bright Opportunity in Solar Technology
Nextracker’s stock surged in May, and here’s why it’s still a great time to buy:
- Sustained Growth Potential: Nextracker’s fiscal year 2025 revenue guidance of $2.8 billion to $2.9 billion suggests continued strong growth. The company’s fundamentals are solid, pointing to considerable upside potential.
- Strong Revenue Growth: Nextracker posted a record Q4 revenue of $737 million, a 40% year-over-year increase, significantly exceeding analyst expectations. Annual revenue also grew over 30% to $2.5 billion.
- Impressive Earnings and EBITDA: Adjusted EBITDA for Q4 doubled year-over-year to $160 million, with annual adjusted EBITDA reaching $521 million. Adjusted diluted EPS for Q4 was $0.96, beating estimates of $0.65, and annual adjusted diluted EPS was $3.06.
- Record Backlog: The company ended the year with a record backlog of over $4 billion, up from $2.6 billion the previous year. This provides strong future revenue visibility and highlights ongoing demand for Nextracker’s solutions.
- Expanding Gross Margin: Gross margin expanded by over 10 percentage points in Q4 to 30%, demonstrating improved cost discipline and operational efficiency.
- Free Cash Flow: Nextracker generated $427 million in adjusted free cash flow for the year, showcasing strong cash generation and financial stability.
- Innovative Solutions and Market Leadership: Nextracker has shipped 100 gigawatts of solar tracking equipment since inception and expanded its global supply chain capacity. The introduction of the Low Carbon Tracker solution, which reduces carbon footprint by up to 35%, underscores its innovation and market leadership.
- Positive Market Sentiment: The stock’s 14% premarket climb to $48.90 reflects strong investor confidence. Despite an 8.2% drop earlier this year, the recent surge indicates renewed optimism.
- Favorable Future Guidance: Analysts’ expectations align with Nextracker’s fiscal 2025 guidance, highlighting the company’s potential for continued growth and market share expansion.
Nextracker’s exceptional Q4 performance, innovative product offerings, and robust future guidance make it a compelling buy. Its strong revenue growth, impressive earnings, expanding margins, and substantial backlog position it well for long-term success. Consider adding Nextracker (NXT) to your portfolio to capitalize on these promising developments.
