Why NASDAQ:NXT Is a Standout High-Growth Stock in a Consolidation Phase.

Last update: Aug 1, 2024

In this article we will dive into NEXTRACKER INC-CL A (NASDAQ:NXT) as a possible candidate for growth investing. Investors should always do their own research, but we noticed NEXTRACKER INC-CL A showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Unpacking NASDAQ:NXT's Growth Rating

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:NXT was assigned a score of 8 for growth:

NXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 999.95%, which is quite impressive.
NXT shows a strong growth in Revenue. In the last year, the Revenue has grown by 31.42%.
NXT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 30.49% yearly.
Based on estimates for the next years, NXT will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.73% on average per year.
NXT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.61% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Unpacking NASDAQ:NXT's Health Rating

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:NXT scores a 7 out of 10:

NXT has an Altman-Z score of 3.10. This indicates that NXT is financially healthy and has little risk of bankruptcy at the moment.
NXT has a Altman-Z score of 3.10. This is in the better half of the industry: NXT outperforms 68.48% of its industry peers.
NXT has a debt to FCF ratio of 0.34. This is a very positive value and a sign of high solvency as it would only need 0.34 years to pay back of all of its debts.
NXT's Debt to FCF ratio of 0.34 is amongst the best of the industry. NXT outperforms 96.74% of its industry peers.
A Debt/Equity ratio of 0.15 indicates that NXT is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.15, NXT is doing good in the industry, outperforming 60.87% of the companies in the same industry.
NXT has a Quick ratio of 1.76. This is in the better half of the industry: NXT outperforms 66.30% of its industry peers.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:NXT, the assigned 9 is noteworthy for profitability:

Looking at the Return On Assets, with a value of 12.16%, NXT belongs to the top of the industry, outperforming 95.65% of the companies in the same industry.
NXT has a better Return On Equity (31.87%) than 94.57% of its industry peers.
Looking at the Return On Invested Capital, with a value of 27.67%, NXT belongs to the top of the industry, outperforming 98.91% of the companies in the same industry.
NXT had an Average Return On Invested Capital over the past 3 years of 17.04%. This is significantly above the industry average of 11.09%.
The 3 year average ROIC (17.04%) for NXT is below the current ROIC(27.67%), indicating increased profibility in the last year.
NXT has a better Profit Margin (12.25%) than 90.22% of its industry peers.
NXT's Profit Margin has improved in the last couple of years.
NXT has a Operating Margin of 23.49%. This is amongst the best in the industry. NXT outperforms 97.83% of its industry peers.
In the last couple of years the Operating Margin of NXT has grown nicely.
NXT has a Gross Margin of 32.52%. This is in the better half of the industry: NXT outperforms 75.00% of its industry peers.
NXT's Gross Margin has improved in the last couple of years.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:NXT has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is only medium, NXT does present a nice setup opportunity. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 48.17, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of NXT

For an up to date full technical analysis you can check the technical report of NXT

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.