In the world of growth stocks, NEXTRACKER INC-CL A (NASDAQ:NXT) shines as a value proposition.

Consider NEXTRACKER INC-CL A (NASDAQ:NXT) as an affordable growth stock, identified by our stock screening tool. NXT is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

How do we evaluate the Growth for NXT?

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NXT has achieved a 8 out of 10:

• The Earnings Per Share has grown by an impressive 57.49% over the past year.
• NXT shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.46%.
• The Revenue has been growing by 30.49% on average over the past years. This is a very strong growth!
• Based on estimates for the next years, NXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.14% on average per year.
• Based on estimates for the next years, NXT will show a quite strong growth in Revenue. The Revenue will grow by 10.99% on average per year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Assessing Valuation Metrics for NXT

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NXT has received a 9 out of 10:

• Based on the Price/Earnings ratio of 10.03, the valuation of NXT can be described as reasonable.
• Based on the Price/Earnings ratio, NXT is valued cheaper than 88.66% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 27.10, NXT is valued rather cheaply.
• A Price/Forward Earnings ratio of 9.97 indicates a reasonable valuation of NXT.
• Based on the Price/Forward Earnings ratio, NXT is valued cheaper than 88.66% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of NXT to the average of the S&P500 Index (20.33), we can say NXT is valued rather cheaply.
• NXT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NXT is cheaper than 92.78% of the companies in the same industry.
• 86.60% of the companies in the same industry are more expensive than NXT, based on the Price/Free Cash Flow ratio.
• NXT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of NXT may justify a higher PE ratio.

Assessing Health Metrics for NXT

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NXT has received a 8 out of 10:

• An Altman-Z score of 3.05 indicates that NXT is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.05, NXT is in the better half of the industry, outperforming 75.26% of the companies in the same industry.
• The Debt to FCF ratio of NXT is 0.29, which is an excellent value as it means it would take NXT, only 0.29 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 0.29, NXT belongs to the best of the industry, outperforming 94.85% of the companies in the same industry.
• A Debt/Equity ratio of 0.10 indicates that NXT is not too dependend on debt financing.
• NXT has a better Debt to Equity ratio (0.10) than 68.04% of its industry peers.
• NXT has a Current Ratio of 2.20. This indicates that NXT is financially healthy and has no problem in meeting its short term obligations.
• NXT has a better Current ratio (2.20) than 64.95% of its industry peers.
• The Quick ratio of NXT (1.96) is better than 78.35% of its industry peers.

Profitability Insights: NXT

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NXT, the assigned 9 is noteworthy for profitability:

• Looking at the Return On Assets, with a value of 18.69%, NXT belongs to the top of the industry, outperforming 98.97% of the companies in the same industry.
• The Return On Equity of NXT (39.64%) is better than 98.97% of its industry peers.
• With an excellent Return On Invested Capital value of 26.41%, NXT belongs to the best of the industry, outperforming 97.94% of the companies in the same industry.
• NXT had an Average Return On Invested Capital over the past 3 years of 17.04%. This is significantly above the industry average of 9.17%.
• 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 100.00% of its industry peers.
• In the last couple of years the Profit Margin of NXT has grown nicely.
• With an excellent Operating Margin value of 25.83%, NXT belongs to the best of the industry, outperforming 98.97% of the companies in the same industry.
• NXT's Operating Margin has improved in the last couple of years.
• The Gross Margin of NXT (37.66%) is better than 84.54% of its industry peers.
• NXT's Gross Margin has improved in the last couple of years.

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.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.