Opinions
Jason Donville
Nextracker
NXT-Q
HOLD
Jun 05, 2024
Stock price when the opinion was issued
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The global provider of solar panel monitoring technology has over $2 billion in order backlogs. It trades at 28x earnings and supports a 43% ROE. We like that cash reserves are growing, while shares are aggressively bought back and debt is reduced. We recommend setting a stop-loss at $44, looking to achieve $65 -- upside potential of 22%. Yield 0%
(Analysts’ price target is $64.88)We would attribute a lot of the weakness simply to investor boredom and digesting recent gains. In the short-term, NXT can trade in sympathy to interest rate expectations, with rates impacting feasibility of solar projects, so there might be some sentiment around rates weighing on shares. Overall though, the fundamentals remain strong as does the growth and tax credits/infrastructure spending over the next two years should act as a support for demand of their products.
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Managing solar panels to maximize sun's benefit. Huge order backlog. Really strong quarter. Stock's been all over the map, which often happens in a company's first year; don't read too much into that. With global warming, in right space at right time.