NEXTRACKER INC-CL A (NASDAQ:NXT), a growth stock which is not overvalued.

NEXTRACKER INC-CL A (NASDAQ:NXT) has caught the eye of our stock screener as an affordable growth stock. NXT is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

A Closer Look at Growth for NXT

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NXT was assigned a score of 7 for growth:

• NXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 57.49%, which is quite impressive.
• Looking at the last year, NXT shows a very strong growth in Revenue. The Revenue has grown by 21.46%.
• NXT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 30.49% yearly.
• The Revenue is expected to grow by 10.99% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Deciphering NXT's Valuation Rating

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NXT scores a 8 out of 10:

• With a Price/Earnings ratio of 11.61, the valuation of NXT can be described as very reasonable.
• Compared to the rest of the industry, the Price/Earnings ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 89.13% of the companies listed in the same industry.
• When comparing the Price/Earnings ratio of NXT to the average of the S&P500 Index (28.38), we can say NXT is valued rather cheaply.
• With a Price/Forward Earnings ratio of 11.59, the valuation of NXT can be described as very reasonable.
• NXT's Price/Forward Earnings ratio is rather cheap when compared to the industry. NXT is cheaper than 85.87% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 21.15. NXT is valued slightly cheaper when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 91.30% of the companies listed in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 88.04% of the companies listed in the same industry.
• NXT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• NXT has an outstanding profitability rating, which may justify a higher PE ratio.

How do we evaluate the Health for NXT?

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NXT, the assigned 8 for health provides valuable insights:

• An Altman-Z score of 3.39 indicates that NXT is not in any danger for bankruptcy at the moment.
• NXT has a better Altman-Z score (3.39) than 77.17% of its industry peers.
• NXT has a debt to FCF ratio of 0.29. This is a very positive value and a sign of high solvency as it would only need 0.29 years to pay back of all of its debts.
• The Debt to FCF ratio of NXT (0.29) is better than 94.57% of its industry peers.
• A Debt/Equity ratio of 0.10 indicates that NXT is not too dependend on debt financing.
• NXT has a Debt to Equity ratio of 0.10. This is in the better half of the industry: NXT outperforms 66.30% of its industry peers.
• A Current Ratio of 2.20 indicates that NXT has no problem at all paying its short term obligations.
• The Current ratio of NXT (2.20) is better than 63.04% of its industry peers.
• NXT's Quick ratio of 1.96 is fine compared to the rest of the industry. NXT outperforms 77.17% of its industry peers.

Profitability Assessment of NXT

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NXT has earned a 9 out of 10:

• NXT has a better Return On Assets (18.69%) than 100.00% of its industry peers.
• NXT has a Return On Equity of 39.64%. This is amongst the best in the industry. NXT outperforms 98.91% of its industry peers.
• NXT's Return On Invested Capital of 26.41% is amongst the best of the industry. NXT outperforms 97.83% of its industry peers.
• NXT had an Average Return On Invested Capital over the past 3 years of 17.04%. This is significantly above the industry average of 9.82%.
• The 3 year average ROIC (17.04%) for NXT is below the current ROIC(26.41%), indicating increased profibility in the last year.
• The Profit Margin of NXT (20.12%) is better than 98.91% of its industry peers.
• In the last couple of years the Profit Margin of NXT has grown nicely.
• The Operating Margin of NXT (25.83%) is better than 98.91% of its industry peers.
• NXT's Operating Margin has improved in the last couple of years.
• NXT has a Gross Margin of 37.66%. This is amongst the best in the industry. NXT outperforms 85.87% of its industry peers.
• In the last couple of years the Gross Margin of NXT has grown nicely.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of NXT for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.