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

Last update: Dec 18, 2024

Our stock screener has spotted NEXTRACKER INC-CL A (NASDAQ:NXT) as a growth stock which is not overvalued. NASDAQ:NXT is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Understanding NASDAQ:NXT's Growth Score

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:NXT, the assigned 7 reflects its growth potential:

The Earnings Per Share has grown by an impressive 1791.80% over the past year.
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.
NXT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.54% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

How We Gauge Valuation for NASDAQ:NXT

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:NXT was assigned a score of 8 for valuation:

NXT is valuated reasonably with a Price/Earnings ratio of 9.35.
Based on the Price/Earnings ratio, NXT is valued cheaply inside the industry as 93.18% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.77. NXT is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.48, which indicates a very decent valuation of NXT.
Based on the Price/Forward Earnings ratio, NXT is valued cheaply inside the industry as 90.91% of the companies are valued more expensively.
NXT is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.38, which is the current average of the S&P500 Index.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 94.32% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, NXT is valued cheaper than 92.05% of the companies in the same industry.
The excellent profitability rating of NXT may justify a higher PE ratio.

Health Analysis 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 7 for health:

The Altman-Z score of NXT (2.94) is better than 68.18% of its industry peers.
The Debt to FCF ratio of NXT is 0.34, which is an excellent value as it means it would take NXT, only 0.34 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.34, NXT belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
NXT has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.11, NXT is doing good in the industry, outperforming 61.36% of the companies in the same industry.
A Current Ratio of 2.21 indicates that NXT has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.21, NXT is doing good in the industry, outperforming 63.64% of the companies in the same industry.
Looking at the Quick ratio, with a value of 1.99, NXT is in the better half of the industry, outperforming 78.41% of the companies in the same industry.

How do we evaluate the Profitability for NASDAQ:NXT?

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:NXT was assigned a score of 9 for profitability:

NXT's Return On Assets of 17.54% is amongst the best of the industry. NXT outperforms 98.86% of its industry peers.
With an excellent Return On Equity value of 38.36%, NXT belongs to the best of the industry, outperforming 98.86% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 27.99%, NXT belongs to the top of the industry, outperforming 100.00% 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 9.38%.
The 3 year average ROIC (17.04%) for NXT is below the current ROIC(27.99%), indicating increased profibility in the last year.
The Profit Margin of NXT (17.33%) is better than 97.73% of its industry peers.
NXT's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 25.56%, NXT belongs to the top of the industry, outperforming 98.86% of the companies in the same industry.
NXT's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 36.13%, NXT belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
NXT's Gross Margin has improved in the last couple of years.

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

Check the latest full fundamental report of NXT for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.