On Tuesday, Barclays (LON:BARC) adjusted its stance on Nextracker Inc (NASDAQ:NXT), moving the stock rating from Overweight to Equal Weight, while increasing the price target to $63 from $55.
The firm's analyst cited the upcoming fiscal year 2025 outlook and backlog update expected in Nextracker's next earnings call as a factor in the decision. The analyst acknowledged the possibility of Nextracker meeting the Bloomberg consensus revenue of $2.9 billion, indicating a year-over-year growth of 17%, but suggested the company might initially set a more conservative guidance.
"Despite the downgrade to Equal Weight, we still believe NXT should be a core holding and investors can count on the stock to be a consistent performer, and our ratings change is more a relative valuation call," said the analyst.
The industry-wide issues, such as transformer shortages and interconnection queues, were highlighted as potential challenges that Nextracker is likely to consider when setting expectations. These factors might encourage the company to maintain a cautious approach and incorporate a buffer in their projections.
InvestingPro Insights
As Nextracker Inc (NASDAQ:NXT) prepares for its upcoming earnings call, investors monitoring the company's performance can consider several key metrics and insights from InvestingPro. With a market capitalization of $12.31 billion and a significant revenue growth of 25.12% in the last twelve months as of Q3 2024, Nextracker shows a strong financial position. This growth is further underscored by a robust gross profit margin of 24.67% and an impressive EBITDA growth of 136.65% in the same period.
InvestingPro Tips highlight that Nextracker holds more cash than debt on its balance sheet and is expected to see net income growth this year. Additionally, analysts predict the company will be profitable this year, which aligns with the positive sentiment expressed by Barclays despite the recent adjustment to an Equal Weight rating. These factors, combined with a strong return of 54.99% over the last year, make Nextracker an interesting prospect for investors seeking growth potential.
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