Nextracker (NXT): Evaluating Valuation After Launch of NX PowerMerge Post-Bentek Acquisition

If you have been tracking Nextracker (NXT) lately, the company’s launch of its NX PowerMerge trunk connector might have caught your eye. This isn’t just another product drop. Nextracker is stepping squarely into the spotlight with an innovation designed to make large-scale solar projects more efficient and reliable, and importantly, to cement its position after its acquisition of Bentek earlier this year. For investors, this kind of tangible, technology-driven progress can mean shifts in growth assumptions or how the market rates the company’s potential to lead in an increasingly competitive field.

There’s a bigger picture unfolding here for Nextracker. Over the past year, the stock has surged more than 100%, boasting meaningful momentum both in the short term and since the start of the year. While management is busy highlighting cutting-edge product introductions and engaging with industry players, such as at their recent ROTH Solar & Storage Symposium presentation, the market has responded with continued optimism. Recent gains hint at growing confidence that Nextracker is not just keeping pace but possibly setting the pace in solar project technology.

So with new product momentum and a lofty share price, is Nextracker still undervalued after this strong run, or is the market already factoring in all that future growth?

Most Popular Narrative: 1.5% Undervalued

According to the most widely followed narrative, Nextracker is seen as modestly undervalued relative to its fair value estimate. This view stems from bullish assumptions about the company’s growth trajectory, product innovation, and financial expansion.

“Nextracker's global expansion of R&D facilities in the U.S., Brazil, and India, along with the partnership with UC Berkeley for solar technology research, is expected to reinforce its commitment to innovation and position the company as a leader in solar technology, impacting long-term revenue and growth.”

Want to know what’s powering this bold price target? It’s not just management hype. There are specific forward-looking assumptions here that could surprise you. Think margins that shift, investor expectations for big earnings growth, and premium multiples that hint at tech-stock levels of optimism. Wondering just how aggressive these projections get? Dive in to uncover the financial guts behind the valuation.

Result: Fair Value of $70.84 (UNDERVALUED)

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

However, uncertainties around tariffs and ongoing U.S. market dependence could quickly challenge these optimistic growth assumptions if conditions change unexpectedly.

Find out about the key risks to this Nextracker narrative.

Another View: DCF Model Perspective

Taking a step back from analyst consensus, our SWS DCF model provides another angle. By projecting future cash flows, this approach also indicates Nextracker is trading below its estimated fair value. However, are these long-term cash flow forecasts realistic?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nextracker for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Nextracker Narrative

If you see things differently or want to dig into the numbers yourself, you can build a customized narrative in just a few minutes. Do it your way.

A great starting point for your Nextracker research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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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