Nextracker (NXT) is forecasting revenue growth at 10.2% per year, edging out the US market’s 10% pace, while EPS is expected to climb 7.8% annually compared to the broader US market’s 15.5%. The company reported a net profit margin of 17.1%, which is slightly beneath last year’s 17.2%. Over the last five years, Nextracker’s earnings have averaged rapid annual growth of 58.9%. However, recent earnings growth of 19.3% is below this longer-term trend.

Next, we’ll see how these headline results compare to the narratives that dominate market conversations. Sometimes the numbers support the story, and sometimes they upend it.

Analyst Price Target Lags Behind Current Share Price

• The current share price of $98.28 is 2.2% above the analyst price target of $96.12 and 10.6% above DCF fair value at $88.82, raising questions about potential upside from here.
• According to the analysts' consensus view, for Nextracker to justify its current market valuation, the company would need to increase earnings to $663.3 million by 2028 and trade on a PE ratio of 22.0x, both of which are notably more demanding than its current $544.7 million in earnings.
  • Consensus narrative highlights that bulls are betting on ongoing innovation and strong demand to close this gap, while skeptics point to the risk that margins could shrink from 17.5% to 15.3%, making the current price look full if growth slows.
  • With analyst estimates ranging widely, from $38.00 to $97.00, the stock’s premium signals real disagreement about Nextracker’s future profitability and valuation multiples.

What will it take for Nextracker to deliver on ambitious forecasts? Dive into the numbers and outlook in the full consensus story. 📊 Read the full Nextracker Consensus Narrative.

Profit Margins Remain Resilient as Costs Evolve

• Nextracker maintains a solid net profit margin at 17.1%, just below last year’s 17.2%, defying analyst expectations that margins could shrink further amid industry price pressure.
• Analysts' consensus view acknowledges margin pressure from global cost competition, but points to the company’s leadership in supply chain localization and innovative products, such as TrueCapture software, as key advantages.
  • Consensus notes that strategic R&D expansion and partnerships help bolster pricing power, underlining why Nextracker has not seen sharper compression in profitability yet.
  • Bulls believe these moves provide a buffer against rising costs, but bears argue any future slip in efficiency or demand could quickly erode this margin edge.

Valuation Ratios Offer Relative Value Versus Peers

• Nextracker’s price-to-earnings ratio stands at 25.2x, meaningfully lower than the US Electrical industry average of 30.8x and a peer group average of 40.7x, signaling relative value.
• Under analysts' consensus, Nextracker’s valuation appeal is closely tied to its history of high-quality earnings growth, averaging 58.9% per year over five years, even as year-on-year gains cooled to 19.3%.
  • Consensus narrative underlines that this attractive multiple could draw in valuation-focused investors, but only if the company’s revenue and earnings trends sustain their momentum as forecasted.
  • With the market rewarding strong R&D investment and visible long-term demand, any hint of growth disappointment could quickly alter this favorable valuation picture.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Nextracker on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Have your own take on Nextracker's figures? Share your unique perspective and shape your narrative in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Nextracker.

See What Else Is Out There

Nextracker’s high growth is impressive, but its current share price premium and ambitious earnings targets create real uncertainty if performance slips or margins shrink.

If you want stocks that may offer more value for your money, use our these 872 undervalued stocks based on cash flows to quickly spot companies trading below what their cash flows suggest they are worth.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.