Analyst Vikram Bagri from Citi maintained a Hold rating on NEXTracker, Inc. Class A (NXT – Research Report) and keeping the price target at $56.00.
Vikram Bagri has given his Hold rating due to a combination of factors affecting NEXTracker, Inc. Class A. The company posted a significant earnings per share beat and demonstrated strong growth in bookings, which led to a robust backlog. With revenues expected to grow and gross margins approaching a higher target, there are positive indicators in NXT’s performance. However, the firm is experiencing pricing pressure and expects a slight year-over-year decline in adjusted EBITDA/EPS despite higher revenues. Bagri’s cautious stance reflects the conservative profitability guidance provided by the company, which, while potentially under-promising, might make future outperformance more challenging.
Furthermore, the robust backlog and NXT’s ability to avoid cancellations, unlike its peers, reflect a resilient demand for its offerings. The company’s guidance includes higher structural margins and a solid free cash flow conversion expectation. However, the balance between strong sales performance and the need to maintain achievable guidance amidst potential operational cost reductions contributes to the Hold rating. Bagri’s analysis, therefore, underscores a carefully optimistic view of the company’s financial health, with recognition of the risks associated with maintaining profitability in a competitive and dynamic market.
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NEXTracker, Inc. Class A (NXT) Company Description:
NEXTracker Inc provides integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed solar generation projects worldwide. Nextracker’s products enable solar panels in utility-scale power plants to follow the sun’s movement across the sky and optimize plant performance. It generates revenue from selling solar trackers, such as NX Horizon and NX Gemini, and from licensing TrueCapture software products.
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