Stock Analysis: Affordable Growth

Fundamental Rating

Taking everything into account, NXT scores 8 out of 10 in our fundamental rating. NXT was compared to 97 industry peers in the Electrical Equipment industry. NXT gets an excellent profitability rating and is at the same time showing great financial health properties. NXT is evaluated to be cheap and growing strongly. This does not happen too often! This makes NXT very considerable for value and growth and quality investing!

1. Profitability

1.1 Basic Checks

In the past year NXT was profitable.

NXT had a positive operating cash flow in the past year.

In the past 5 years NXT has always been profitable.

NXT had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 18.69%, NXT belongs to the top of the industry, outperforming 98.97% of the companies in the same industry.

NXT's Return On Equity of 39.64% is amongst the best of the industry. NXT outperforms 98.97% of its industry peers.

NXT has a Return On Invested Capital of 26.41%. This is amongst the best in the industry. NXT outperforms 97.94% 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 9.56%.

The last Return On Invested Capital (26.41%) for NXT is above the 3 year average (17.04%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	18.69%
ROE	39.64%
ROIC	26.41%

ROA(3y)5.75%

ROA(5y)10.09%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)17.04%

ROIC(5y)24.1%

1.3 Margins

With an excellent Profit Margin value of 20.12%, NXT belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.

NXT's Profit Margin has improved in the last couple of years.

With an excellent Operating Margin value of 25.83%, NXT belongs to the best of the industry, outperforming 98.97% of the companies in the same industry.

NXT's Operating Margin has improved in the last couple of years.

Looking at the Gross Margin, with a value of 37.66%, NXT belongs to the top of the industry, outperforming 85.57% of the companies in the same industry.

In the last couple of years the Gross Margin of NXT has grown nicely.

		Industry Rank	Sector Rank
OM	25.83%
PM (TTM)	20.12%
GM	37.66%

OM growth 3Y20.99%

OM growth 5Y165.92%

PM growth 3Y5.61%

PM growth 5YN/A

GM growth 3Y18.79%

GM growth 5Y30.61%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

NXT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.

The number of shares outstanding for NXT has been increased compared to 1 year ago.

The number of shares outstanding for NXT has been reduced compared to 5 years ago.

Compared to 1 year ago, NXT has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 3.06 indicates that NXT is not in any danger for bankruptcy at the moment.

NXT has a better Altman-Z score (3.06) than 72.16% of its industry peers.

NXT has a debt to FCF ratio of 0.29. This is a very positive value and a sign of high solvency as it would only need 0.29 years to pay back of all of its debts.

NXT's Debt to FCF ratio of 0.29 is amongst the best of the industry. NXT outperforms 94.85% of its industry peers.

NXT has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.

With a decent Debt to Equity ratio value of 0.10, NXT is doing good in the industry, outperforming 68.04% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.1
Debt/FCF	0.29
Altman-Z	3.06

ROIC/WACC2.98

WACC8.85%

2.3 Liquidity

A Current Ratio of 2.20 indicates that NXT has no problem at all paying its short term obligations.

With a decent Current ratio value of 2.20, NXT is doing good in the industry, outperforming 64.95% of the companies in the same industry.

A Quick Ratio of 1.96 indicates that NXT should not have too much problems paying its short term obligations.

NXT has a better Quick ratio (1.96) than 76.29% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.2
Quick Ratio	1.96

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 57.49% over the past year.

Measured over the past years, NXT shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -11.33% on average per year.

NXT shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.46%.

The Revenue has been growing by 30.49% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)57.49%

EPS 3Y-11.33%

EPS 5YN/A

EPS Q2Q%7.29%

Revenue 1Y (TTM)21.46%

Revenue growth 3Y27.87%

Revenue growth 5Y30.49%

Sales Q2Q%-4.37%

3.2 Future

NXT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.92% yearly.

Based on estimates for the next years, NXT will show a quite strong growth in Revenue. The Revenue will grow by 10.91% on average per year.

EPS Next Y27.72%

EPS Next 2Y13.18%

EPS Next 3Y10.57%

EPS Next 5Y7.92%

Revenue Next Year16.53%

Revenue Next 2Y13.8%

Revenue Next 3Y11.84%

Revenue Next 5Y10.91%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 10.59, the valuation of NXT can be described as very reasonable.

Based on the Price/Earnings ratio, NXT is valued cheaper than 88.66% of the companies in the same industry.

When comparing the Price/Earnings ratio of NXT to the average of the S&P500 Index (27.63), we can say NXT is valued rather cheaply.

A Price/Forward Earnings ratio of 10.54 indicates a reasonable valuation of NXT.

Compared to the rest of the industry, the Price/Forward Earnings ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 88.66% of the companies listed in the same industry.

NXT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.85, which is the current average of the S&P500 Index.