Don't overlook NASDAQ:NXT—a stock with solid growth prospects and a reasonable valuation.

Last update: Nov 27, 2024

Our stock screening tool has pinpointed NEXTRACKER INC-CL A (NASDAQ:NXT) as a growth stock that isn't overvalued. NASDAQ:NXT is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Evaluating Growth: NASDAQ:NXT

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:NXT has received a 8 out of 10:

NXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 1791.80%, which is quite impressive.
NXT shows a strong growth in Revenue. In the last year, the Revenue has grown by 34.43%.
Measured over the past years, NXT shows a very strong growth in Revenue. The Revenue has been growing by 30.49% on average per year.
The Earnings Per Share is expected to grow by 8.73% on average over the next years. This is quite good.
Based on estimates for the next years, NXT will show a quite strong growth in Revenue. The Revenue will grow by 10.61% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Understanding NASDAQ:NXT's Valuation Score

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:NXT has achieved a 8 out of 10:

NXT is valuated reasonably with a Price/Earnings ratio of 10.18.
Based on the Price/Earnings ratio, NXT is valued cheaply inside the industry as 95.51% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of NXT to the average of the S&P500 Index (29.61), we can say NXT is valued rather cheaply.
A Price/Forward Earnings ratio of 11.39 indicates a reasonable valuation of NXT.
87.64% of the companies in the same industry are more expensive than NXT, based on the Price/Forward Earnings ratio.
NXT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.24.
Based on the Enterprise Value to EBITDA ratio, NXT is valued cheaper than 94.38% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 92.13% of the companies listed in the same industry.
The excellent profitability rating of NXT may justify a higher PE ratio.

What does the Health looks like for NASDAQ:NXT

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:NXT was assigned a score of 8 for health:

An Altman-Z score of 3.12 indicates that NXT is not in any danger for bankruptcy at the moment.
NXT has a Altman-Z score of 3.12. This is in the better half of the industry: NXT outperforms 71.91% 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 has a better Debt to FCF ratio (0.34) than 95.51% of its industry peers.
A Debt/Equity ratio of 0.11 indicates that NXT is not too dependend on debt financing.
NXT has a better Debt to Equity ratio (0.11) than 64.04% of its industry peers.
NXT has a Current Ratio of 2.21. This indicates that NXT is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.21, NXT is in the better half of the industry, outperforming 64.04% of the companies in the same industry.
NXT's Quick ratio of 1.99 is fine compared to the rest of the industry. NXT outperforms 77.53% of its industry peers.

How do we evaluate the Profitability for NASDAQ:NXT?

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:

NXT has a better Return On Assets (17.54%) than 98.88% of its industry peers.
NXT has a Return On Equity of 38.36%. This is amongst the best in the industry. NXT outperforms 98.88% of its industry peers.
NXT has a Return On Invested Capital of 27.99%. This is amongst the best in the industry. NXT outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NXT is significantly above the industry average of 9.63%.
The last Return On Invested Capital (27.99%) for NXT is above the 3 year average (17.04%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 17.33%, NXT belongs to the best of the industry, outperforming 97.75% of the companies in the same industry.
NXT's Profit Margin has improved in the last couple of years.
NXT's Operating Margin of 25.56% is amongst the best of the industry. NXT outperforms 98.88% of its industry peers.
NXT's Operating Margin has improved in the last couple of years.
NXT's Gross Margin of 36.13% is amongst the best of the industry. NXT outperforms 82.02% of its industry peers.
NXT's Gross Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental 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.