NXT gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 97 industry peers in the Electrical Equipment industry. NXT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. An interesting combination arises when we look at growth and value: NXT is growing strongly while it also seems undervalued. With these ratings, NXT could be worth investigating further for value and growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year NXT was profitable.
In the past year NXT had a positive cash flow from operations.
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
NXT's Return On Assets of 18.69% is amongst the best of the industry. NXT outperforms 98.97% of its industry peers.
Looking at the Return On Equity, with a value of 39.64%, NXT belongs to the top of the industry, outperforming 98.97% of the companies in the same industry.
NXT's Return On Invested Capital of 26.41% is amongst the best of 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 3 year average ROIC (17.04%) for NXT is below the current ROIC(26.41%), indicating increased profibility in the last year.
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
NXT has a better Profit Margin (20.12%) than 100.00% of its industry peers.
In the last couple of years the Profit Margin of NXT has grown nicely.
The Operating Margin of NXT (25.83%) is better than 98.97% of its industry peers.
NXT's Operating Margin has improved in the last couple of years.
NXT's Gross Margin of 37.66% is amongst the best of the industry. NXT outperforms 85.57% of its industry peers.
In the last couple of years the Gross Margin of NXT has grown nicely.
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NXT is creating value.
Compared to 1 year ago, NXT has more shares outstanding
NXT has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NXT has been reduced compared to a year ago.
2.2 Solvency
NXT has an Altman-Z score of 3.06. This indicates that NXT is financially healthy and has little risk of bankruptcy at the moment.
NXT has a better Altman-Z score (3.06) than 72.16% of its industry peers.
The Debt to FCF ratio of NXT is 0.29, which is an excellent value as it means it would take NXT, only 0.29 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.29, NXT belongs to the top of the industry, outperforming 94.85% of the companies in the same industry.
NXT has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of NXT (0.10) is better than 68.04% of its industry peers.
Industry Rank
Sector Rank
Debt/Equity
0.1
Debt/FCF
0.29
Altman-Z
3.06
ROIC/WACC2.96
WACC8.93%
2.3 Liquidity
NXT has a Current Ratio of 2.20. This indicates that NXT is financially healthy and has no problem in meeting its short term obligations.
NXT's Current ratio of 2.20 is fine compared to the rest of the industry. NXT outperforms 64.95% of its industry peers.
NXT has a Quick Ratio of 1.96. This is a normal value and indicates that NXT is financially healthy and should not expect problems in meeting its short term obligations.
NXT has a Quick ratio of 1.96. This is in the better half of the industry: NXT outperforms 76.29% of its industry peers.
Based on the Price/Earnings ratio of 10.38, the valuation of NXT can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of NXT indicates a rather cheap valuation: NXT is cheaper than 88.66% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.33. NXT is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.33, which indicates a very decent valuation of NXT.
NXT's Price/Forward Earnings ratio is rather cheap when compared to the industry. NXT is cheaper than 88.66% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.37, NXT is valued rather cheaply.
Industry Rank
Sector Rank
PE
10.38
Fwd PE
10.33
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NXT is valued cheaper than 91.75% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NXT is valued cheaper than 86.60% of the companies in the same industry.
Industry Rank
Sector Rank
P/FCF
11.68
EV/EBITDA
7.13
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NXT may justify a higher PE ratio.