Assessing Nextpower’s Value After a 129% Surge and Major Utility Partnership in 2025

• Thinking about whether Nextpower is a good buy right now? You're not alone, as questions about its value have been buzzing with the stock's impressive climb.
• In just the past year, Nextpower shares have surged by 140.9%, including a 129.2% gain year-to-date. However, they have dipped 6.2% over the last week.
• Much of the excitement comes on the heels of industry-wide optimism for clean energy and news of a high-profile partnership with a major utility. Both of these factors have contributed to recent volatility and upward momentum.
• Nextpower currently earns a valuation score of 4 out of 6 based on key metrics. We will unpack what that means, how common valuation approaches compare, and how you might get a clearer, more actionable read on the company's true value by the end of our analysis.

Nextpower delivered 140.9% returns over the last year. See how this stacks up to the rest of the Electrical industry.

Approach 1: Nextpower Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's true value by projecting its future cash flows and then discounting them back to today to account for risk and the time value of money. This approach focuses on how much cash Nextpower is expected to actually generate for its shareholders over time.

Currently, Nextpower produces Free Cash Flow (FCF) of $620.8 Million each year. Analysts forecast steady growth ahead, with FCF projected to reach $920.3 Million by 2030. For years after 2027, these projections are typically less precise and are extrapolated by financial models. Simply Wall St uses a 2 Stage Free Cash Flow to Equity model to extend these forecasts up to 10 years, converting estimates beyond the analyst window into projected figures.

Based on these cash flow forecasts, Nextpower's estimated intrinsic value is $101.52 per share. With the stock currently trading at a 10.8% discount to this intrinsic value, the DCF analysis suggests the stock is currently undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Nextpower is undervalued by 10.8%. Track this in your watchlist or portfolio, or discover 900 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Nextpower.

Approach 2: Nextpower Price vs Earnings

Price-to-Earnings (P/E) ratios are a widely used way to value companies that are profitable, like Nextpower, because they compare the price investors are willing to pay for each dollar of earnings. This helps gauge not just what a company has earned, but what the market expects it to earn in the future.

A company's "normal" or "fair" P/E ratio is shaped by how quickly its earnings are expected to grow, its risk profile, and how it compares to similar businesses. Higher expected growth or lower risk usually justify a higher P/E, while slower growth or greater risk can result in a lower P/E.

Currently, Nextpower trades at a P/E of 23.3x. This is below the average for its industry, Electrical, which is 26.7x, and well below its peer group average of 35.9x. However, Simply Wall St calculates a Fair Ratio for Nextpower of 34.0x, which reflects a balanced view of the company’s future earnings prospects, profit margins, market size, and specific risks.

The Fair Ratio stands out as a superior benchmark because it is tailored to Nextpower’s unique characteristics rather than relying solely on broad averages or competitor comparisons. This approach accounts for the company’s growth outlook, risk factors, profitability, and scale, providing a more nuanced view of valuation.

With Nextpower’s P/E of 23.3x compared to a Fair Ratio of 34.0x, the shares appear to be trading at a significant discount relative to what would be expected given its fundamentals.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Nextpower Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. Narratives are a simple but powerful concept. Think of them as a story you create to explain your perspective on a company, combining your assumptions about future growth, margins, and value with the real numbers. With a Narrative, investors connect the company’s big picture outlook (like new partnerships, demand, or risk) to their own forecast and then to a fair value, all in a way that’s easy to follow.

On Simply Wall St’s Community page, millions of investors build and share Narratives, using this tool to break down their assumptions and test ideas about when to buy or sell by comparing their calculated Fair Value against the actual stock price. The real beauty is that Narratives update automatically when new information, such as breaking news or quarterly earnings, hits the market, so your insights stay current.

For example, some investors may believe Nextpower’s recent global partnerships and innovation pipeline support a Fair Value as high as $99.04 per share. Others, more cautious about industry risks, assign a Fair Value as low as $38.00. This demonstrates how Narratives capture the full range of perspectives behind a stock’s price.

Do you think there's more to the story for Nextpower? Head over to our Community to see what others are saying!

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.

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