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 strong growth potential while maintaining solid profitability and financial health. The stock also appears reasonably valued, making it an interesting candidate for investors seeking growth at a sensible price. Below, we break down the key factors that make NXT stand out.

Growth Prospects

NXT has shown impressive growth metrics, with a ChartMill Growth Rating of 7/10. Key highlights include:

• Earnings Per Share (EPS) growth of 38.36% over the past year.
• A three-year average annual EPS growth rate of 32.95%, indicating sustained expansion.
• Revenue growth of 18.38% in the last year, with a three-year average of 20.37%.
• Expected future revenue growth of 9.87% annually, suggesting continued momentum.

While growth rates are projected to moderate slightly, the company’s historical performance remains strong compared to industry peers.

Valuation

NXT holds a ChartMill Valuation Rating of 6/10, indicating a reasonable price relative to fundamentals:

• P/E ratio of 15.75, below the industry average of 35.50 and the S&P 500’s 27.29.
• Forward P/E of 16.83, cheaper than 80.85% of industry competitors.
• Enterprise Value/EBITDA and Price/Free Cash Flow ratios are also favorable, ranking better than 82.98% and 90.43% of peers, respectively.

These metrics suggest NXT is priced attractively given its growth trajectory.

Profitability & Financial Health

NXT excels in profitability with a ChartMill Profitability Rating of 9/10:

• Return on Assets (15.95%) and Return on Equity (31.27%) rank in the top 3% of the industry.
• Operating Margin of 21.65% outperforms 98.94% of competitors.
• Strong cash flow generation with consistent profitability over the past five years.

Financial health is also solid (ChartMill Health Rating of 7/10):

• No outstanding debt, reducing financial risk.
• Current Ratio of 2.09 and Quick Ratio of 1.89 indicate sufficient liquidity.
• Altman-Z score of 4.62 signals low bankruptcy risk.

Conclusion

NXT combines strong growth, high profitability, and a stable financial position with a valuation that doesn’t appear stretched. For investors looking for growth at a reasonable price, NXT presents a compelling case.

Our Affordable Growth screener lists more stocks meeting these criteria and is updated daily.
For a deeper dive, review the full fundamental analysis of NXT.

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.