Assessing NFI Group (TSX:NFI)’s Valuation After Battery Settlement and Zero‑Emission Strategy Boost

NFI Group (TSX:NFI) just drew a line under its costly battery recall issues, signing a master settlement agreement with XALT Energy that recovers most of its provisions and hands NFI valuable battery assets and expertise.

See our latest analysis for NFI Group.

That backdrop helps explain why the share price has jumped 12.27 percent in the last day and 10.21 percent over the past month. However, the 1 year total shareholder return is a more modest 4.40 percent and longer term gains remain mixed, suggesting sentiment is improving but still cautious.

If this kind of turnaround story has your attention, it could be worth exploring other transport and industrial names through fast growing stocks with high insider ownership as potential next candidates on your watchlist.

With the recall overhang easing, revenue growing and analysts seeing roughly 40 percent upside to their price targets, is NFI still trading at a discount to its potential, or are markets already pricing in the recovery story?

Most Popular Narrative Narrative: 29.2% Undervalued

With NFI Group last closing at CA$14.46 against a narrative fair value near CA$20.42, the valuation case leans on ambitious improvement in growth and margins backed by a 9.88 percent discount rate.

Recent operational improvements, including supply chain normalization (reduction to only one high-risk supplier and increased parts availability), vertical integration initiatives, and U.K. facility consolidation efforts, are expected to enhance manufacturing efficiency and net margin expansion over the next several years.

Read the complete narrative.

Curious how this story turns deep losses into a confident earnings rebound and a richer multiple? The narrative quietly leans on aggressive revenue scaling, margin repair, and a surprisingly robust profit profile a few years out. Want to see the exact assumptions driving that upside gap?

Result: Fair Value of $20.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering leverage and execution risks around U.K. restructuring and shifting demand toward cheaper ICE buses could quickly undermine the recovery narrative.

Find out about the key risks to this NFI Group narrative.

Build Your Own NFI Group Narrative

If you are skeptical of this view, or simply prefer building on your own analysis, you can craft a custom thesis in minutes using Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding NFI Group.

Looking for more investment ideas?

Before you move on, take a moment to scan a few more high potential ideas on Simply Wall St that could sharpen your next investing decision.

• Capture powerful growth potential in small companies with real financial strength by scanning these 3633 penny stocks with strong financials and spotting tomorrow's leaders before they hit the headlines.
• Position your portfolio at the heart of the AI revolution by targeting companies at the forefront of intelligent automation through these 25 AI penny stocks.
• Lock in opportunities where price still lags quality by focusing on cash flow strength with these 915 undervalued stocks based on cash flows, so you are not chasing yesterday's winners.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com