Jon Windham, an analyst from UBS, maintained the Buy rating on NEXTracker, Inc. Class A. The associated price target remains the same with $110.00.
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Jon Windham has given his Buy rating due to a combination of factors that highlight NEXTracker’s potential for capital redeployment and market leadership. The market seems to be undervaluing NEXTracker’s long-term cash flow return on investment (CFROI), which is expected to be significantly higher than current market expectations. This discrepancy suggests a substantial opportunity for the company to reinvest capital effectively, particularly through mergers and acquisitions, which could drive further earnings growth and maintain a high baseline CFROI.
Additionally, NEXTracker’s position as a leader in solar trackers provides a strategic advantage as it transitions into a broader solar project platform. This move could diversify its revenue streams and create a more stable earnings base, even without subsidies. The comparison with more diversified electrical hardware peers indicates that NEXTracker has similar operating margins but a much higher asset turnover ratio, yet its market valuation does not reflect this potential. Furthermore, with the recent resolution of policy uncertainties in the solar and storage sectors, NEXTracker presents an attractive investment opportunity in the context of the anticipated long-term expansion of U.S. electricity generation.
In another report released yesterday, Roth MKM also reiterated a Buy rating on the stock with a $100.00 price target.
Based on the recent corporate insider activity of 72 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of NXT in relation to earlier this year.