Nextracker Surges with Record Growth and Analyst Confidence
Nextracker Thrives with Strong Financials and Record Bookings
Nextracker Inc. (NASDAQ: NXT) has been making waves with its impressive financial performance recently. The company reported quarterly results that exceeded expectations, showcasing strong demand from both U.S. and international markets. This upturn is attributed to the company's ongoing momentum, including successes from its recently acquired businesses.
Analyst Predictions and Future Outlook
In light of Nextracker's strong performance, analysts from Goldman Sachs, led by Brian Lee, took a bullish stance by reiterating their Buy rating. They have raised their 12-month price forecast significantly to $125 from the previous $89. This reflects a remarkable 38% anticipated upside from the latest share price.
Reasons Behind Analyst Optimism
Goldman's analysts believe that Nextracker's solid execution, an expanding backlog, and strategic acquisitions are driving factors behind their positive outlook. With additional resources and capabilities through these acquisitions, Nextracker is well-positioned to continue its growth trajectory.
Quarterly Financial Highlights
In its latest earnings report, the company disclosed that its fiscal second-quarter revenue for 2026 climbed to $905 million, surpassing Goldman's estimate of $859 million. Adjusted EBITDA for the quarter reached $224 million, which exceeded expectations of $207 million. Additionally, the adjusted earnings per share were reported at $1.19, comfortably above the $1.07 forecast.
Key Financial Metrics
Nextracker's non-GAAP gross margin stood at an impressive 33.1%. This figure was positively influenced by effective cost management and stable pricing. Notably, without the effects of tariffs, this margin could have reached as high as 36%. The company also reported record bookings of approximately $1.2 billion, driving its backlog beyond $5 billion.
Fiscal 2026 Revenue Forecast
As part of its forward-looking statements, Nextracker raised its revenue forecast for fiscal 2026 to a range between $3.275 billion and $3.475 billion, an upward adjustment from the prior estimate of $3.20 billion to $3.45 billion. At the midpoint, this indicates a healthy 14% year-on-year growth. The adjusted EBITDA forecast now sits between $775 million and $815 million, with revised EPS guidance increasing to a range of $4.04–$4.25.
Impact of Acquisitions on Business Performance
Nextracker's strategic acquisitions have proven to be fruitful, as highlighted by record bookings in its eBOS and foundations units. Additionally, Bentek achieved its best performance in four decades, contributing significantly to the revenue growth.
Emerging Opportunities
Moreover, Nextracker's TrueCapture and Origami Solar divisions secured multi-year supply agreements, adding approximately $75 million in future revenue potential. This emerging success is a testament to the company’s robust strategies and focused business units.
Joint Ventures and International Expansion
The company has also announced a significant partnership, forming a 50/50 joint venture with Abunayyan Holding to create Nextracker Arabia. This initiative aims to broaden its reach within the MENA region, expanding the opportunities for growth and further solidifying its market presence.
Strong Financial Position
Goldman analysts praised Nextracker's strong balance sheet, highlighted by $171 million in free cash flow for the quarter and total cash reserves of $845 million. With a renewed $1 billion credit line and expected additional free cash flow of $400 million in the latter half of the fiscal year, the company is well-equipped to support its growth plans.
Revised EPS Estimates
Due to the higher revenue expectations and improved margins, Goldman Sachs has increased its EPS estimates for fiscal years 2026 through 2028 by 2%, 6%, and 7% respectively, forecasting earnings of $4.26, $4.80, and $5.30 for those years.
Current Stock Performance
The market has responded positively to Nextracker's strong showing; shares were observed trading up by 7.92% to $97.54 during the most recent trading session.
Frequently Asked Questions
What is the recent performance of Nextracker?
Nextracker has reported record bookings, surpassing revenue expectations significantly in recent quarters.
Who has a favorable rating for Nextracker's stock?
Goldman Sachs analysts have reaffirmed a Buy rating and raised their price target for Nextracker's stock.
What are the financial highlights for Nextracker's latest quarter?
The fiscal second quarter of 2026 saw revenues reach $905 million, with Adjusted EBITDA at $224 million and an adjusted EPS of $1.19.
What is the future outlook for Nextracker's revenue?
Nextracker raised its fiscal 2026 revenue guidance to between $3.275 billion and $3.475 billion, indicating growth potential.
How does Nextracker plan to expand internationally?
The company formed a joint venture with Abunayyan Holding to establish Nextracker Arabia, which will enhance its operations in the MENA region.
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