NEXTRACKER INC-CL A (NASDAQ:NXT) – A Strong Growth Stock with Reasonable Valuation

NEXTRACKER INC-CL A (NASDAQ:NXT) was identified as an affordable growth stock by our stock screener. NXT demonstrates solid growth, strong profitability, and healthy financials while trading at a reasonable valuation. Below, we break down why this stock stands out.

Growth Prospects

NXT has shown impressive growth in key financial metrics:

• Earnings Per Share (EPS) grew by 38.36% in the past year, with an average annual growth of 32.95% over recent years.
• Revenue increased by 18.38% year-over-year, with a 20.37% average annual growth rate.
• Future revenue is expected to grow at 9.87% annually, though EPS growth is projected to slow to 3.13%.

While future EPS growth appears modest, the company’s historical performance and strong revenue expansion suggest it remains well-positioned in the solar tracking industry.

Valuation

NXT trades at an attractive valuation compared to peers:

• P/E ratio of 14.40, below the S&P 500 average of 26.57 and cheaper than 90.43% of industry competitors.
• Forward P/E of 15.42, lower than the sector average of 49.43.
• Enterprise Value/EBITDA and Price/Free Cash Flow ratios indicate the stock is undervalued relative to most industry peers.

Profitability & Financial Health

• Profitability Score: 9/10 – NXT boasts strong margins, including a 17.21% profit margin (better than 96.81% of industry peers) and a 21.65% operating margin.
• Health Score: 7/10 – The company has no debt, a solid Altman-Z score of 4.30, and healthy liquidity with a current ratio of 2.09.

Conclusion

NXT combines strong historical growth, solid profitability, and a clean balance sheet with a valuation that leaves room for upside. While future EPS growth may slow, its position in the renewable energy sector and efficient operations make it a compelling candidate for growth investors.

For a deeper look, review the full fundamental analysis report for NXT.

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

Disclaimer

This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.