S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
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S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
5 Under-the-Radar Artificial Intelligence (AI) Stocks
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Monday, 3/4/2024
Macy's, United Rentals rise; Apple, Spirit Airlines fall Monday, 3/4/2024
Critical asset just had biggest fall on record (Ad)
DeSantis names Disney World district administrator to run elections in Democratic Orange County
Stock market today: Wall Street inches lower as retailers post holiday numbers
Detecting Cancer in Mere Seconds: Early Investment Opportunity (Ad)
Closing prices for crude oil, gold and other commodities
Ohio foundation begins process to distribute millions in opioid settlement money
S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
5 Under-the-Radar Artificial Intelligence (AI) Stocks
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Monday, 3/4/2024
Macy's, United Rentals rise; Apple, Spirit Airlines fall Monday, 3/4/2024
Critical asset just had biggest fall on record (Ad)
DeSantis names Disney World district administrator to run elections in Democratic Orange County
Stock market today: Wall Street inches lower as retailers post holiday numbers
Detecting Cancer in Mere Seconds: Early Investment Opportunity (Ad)
Closing prices for crude oil, gold and other commodities
Ohio foundation begins process to distribute millions in opioid settlement money
S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
5 Under-the-Radar Artificial Intelligence (AI) Stocks
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Monday, 3/4/2024
Macy's, United Rentals rise; Apple, Spirit Airlines fall Monday, 3/4/2024
Critical asset just had biggest fall on record (Ad)
DeSantis names Disney World district administrator to run elections in Democratic Orange County
Stock market today: Wall Street inches lower as retailers post holiday numbers
Detecting Cancer in Mere Seconds: Early Investment Opportunity (Ad)
Closing prices for crude oil, gold and other commodities
Ohio foundation begins process to distribute millions in opioid settlement money

Nextracker: The sun is rising for this solar stock

Solar field on a sunny day from Nextracker

Key Points

  • Nextracker had a blow-out quarter and raised guidance for the third consecutive quarter. 
  • The company is building momentum with no end to its growth trajectory. 
  • Analysts support the name and have been leading it higher. Will the trend continue in 2024? 
  • 5 stocks we like better than Nextracker

Solar stocks struggled in 2023 and early 2024 due to sluggish demand and a deteriorating outlook for growth, but Nextracker Inc. NASDAQ: NXT is not your run-of-the-mill solar stock. 

While most focus on solar panels, inverters, storage and power generation, Nextracker focuses on what counts: getting the most of the technology available today. Its solar-panel-mounting and sun-tracking systems keep panels finely tuned to the sun's movement, allowing maximum power generation and efficiency. 

If you doubt the company's utility and value to the solar industry, you have only to look at the FQ3/CQ4 results, which have the stock up 25% in pre-market trading. A 25% gain is significant, but more so in this case. Analysts have been unwavering in supporting the company since its IPO and have lifted the consensus target by 10% in three months. The post-release action has the market above consensus and near the range's high-end, but the trend in sentiment should continue now that guidance has set. 

Nextracker blows past robust forecasts for Q4

Nextracker had a robust quarter, displaying clear momentum and accelerating growth. The company reported $710.43 million in revenue for a gain of 38% YOY that outpaced the consensus by 1500 basis points. 

Gains occurred in all geographic regions, including Africa, which crossed a significant threshold in December. More importantly, the revenue gains are driving leverage on the bottom line. The company's GAAP and adjusted margins came in well above consensus, GAAP holding steady compared to last year, to leave the GAAP net income and EPS up 38% and the adjusted by 30%. 

The news that has the stock price up by 25% is the guidance. The guidance confirms the company has growing momentum with backlogs at record levels globally, and the FY outlook increased for the third consecutive quarter. This quarter, management threw caution to the wind and substantially upped the low and high end of the range. 


The new low end for revenue is now $2.45 billion, up 16% from the initial target and above the last set high-end of $2.4 billion. The company also expected significant margin strength, calling for a 30% gain in adjusted EBITDA and no end to the company's growth in sight. Other solar-tracking platforms exist, but Nextracker is the leading solar technology player due to its effectiveness, ease of use, and reliability. 

Nextracker: Well-capitalized and on track to build value

Nextracker's business has produced solid cash flow and free cash flow year-to-date and is helping to build shareholder value. The company continues to run a shareholder deficit but is on track to amend the situation soon. The company's balance sheet is well-capitalized and getting stronger each quarter with the cash balance building, receivables and inventory up and assets growing with only a slight increase in total liabilities.

Analysts favor the stock and have been leading it higher all year. Marketbeat.com tracks 23 analysts rating the stock a consensus "moderate buy" with the number of analysts covering the consensus price target trending higher. The market overran the consensus target of $49 with the post-release pre-opening pop, but it is still below the high-end and recently set targets near $62. A move to that level is worth about 20% to investors, and upward revisions will likely continue. 

The technical outlook: Nextracker throws a strong signal 

Nextracker threw a strong signal with its post-release pop, but we won't know its message until the session's close. There are three potential outcomes: 

  1. The market will continue to rally, supported by analysts' sentiment and rising price targets. 
  2. The pop is partly due to the 15% short interest; short sellers will reposition and cap the market at its new highs, potentially sending it back to firmer support levels near $50. 
  3. Consolidation will begin, leading the market into a trading range at the current price levels. In all three cases, this is solid speculation on the future of solar power but one that investors should wait to buy into. 

Nextracker chart on MarketBeat

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Should you invest $1,000 in Nextracker right now?

Before you consider Nextracker, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Nextracker wasn't on the list.

While Nextracker currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Nextracker (NXT)
3.4948 of 5 stars
$56.76-1.1%N/A30.35Moderate Buy$53.52
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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