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Nextracker (NXT) shares surged to record highs on Friday following a strong earnings report and an upward revision to its sales outlook, leading a broader rally across the solar power sector. The company’s robust performance provided a positive start to the industry’s quarterly reporting season, with the IBD solar power industry group climbing nearly 5%.
Nextracker’s Strong Performance and Outlook
The Fremont, Calif.-based company reported earnings of $1.19 per share late Thursday, marking a 27% increase and aligning with the upper end of analyst estimates. Sales for the period grew 42% to $905 million, significantly exceeding the FactSet consensus of $848 million.
Nextracker’s CEO, Dan Shugar, highlighted a record backlog exceeding $5 billion, attributing the growth to accelerating global demand and strong bookings for the company’s solar tracking products. Shugar also noted early success from recently acquired businesses, contributing to the positive momentum.
The company revised its sales forecast for the fiscal year ending in March to a range of $3.275 billion to $3.475 billion, up from its previous estimate of $3.2 billion to $3.45 billion. Adjusted earnings per share guidance was tightened to $4.04-$4.25, compared to the earlier forecast of $3.96-$4.27.
Nextracker also announced a joint venture in Saudi Arabia with Abunayyan Holding, forming Nextracker Arabia. This initiative aims to accelerate solar adoption across Saudi Arabia, the broader Middle East, and the North Africa region.
Analyst Reactions and Stock Performance
Following the earnings release, several analysts raised their price targets for Nextracker. JPMorgan Chase analyst Mark Strouse increased his price target to $110 from $92, maintaining an “overweight” rating. Strouse noted that “execution remains industry-leading” and suggested that the company’s upcoming Analyst Day on November 12 could serve as a catalyst for long-term strategy details and financial targets.
UBS analyst Jon Windham, who holds a “buy” rating and a $110 price target on Nextracker, also viewed the results positively, stating they are “indicative of (Nextracker’s) ability to quickly scale its newly acquired businesses to capture additional solar project wallet share.” BMO Capital and RBC Capital were also among the firms that raised price targets.
Nextracker stock, which holds an IBD Composite Rating of 98, gapped up to an all-time high of $101.98 on Friday morning. Shares are considered extended after rallying 44% from a $67.87 buy point following a flat-base breakout on August 18.
Upcoming Solar Sector Earnings
Nextracker is the first solar company to report in the current earnings cycle, with several other industry players scheduled to release their results soon.
Array Technologies
Array Technologies (ARRY), another solar-tracking product provider, is set to announce its third-quarter results after the market closes on November 5. Analysts anticipate earnings of 19 cents per share, a 14% year-over-year increase, on sales projected to climb 34% to $310 million. The stock is currently attempting to recover above its $9.68 buy point from a handle area, having previously fallen as much as 12% below it after an initial breakout on October 15.
Sunrun
Residential solar installer and battery provider Sunrun (RUN) will report on November 6 after the close. The consensus estimate is for earnings of 8 cents per share, a significant improvement from a loss of 37 cents per share a year ago. Sales are expected to rise 11% to $597 million. The stock has gained 128% year-to-date, having cleared resistance around $13 in August.
First Solar
First Solar (FSLR), the largest U.S. solar module manufacturer, is scheduled to announce its quarterly results late on Thursday, October 30. Analysts forecast earnings of $4.26 per share, up 46.5%, on sales of $1.584 billion, an increase of 78.5%. Shares are extended from a cup-with-handle breakout in August but are currently finding support at their 10-week moving average.
SolarEdge
Inverter maker SolarEdge (SEDG) is due to report on November 5 before the market opens. The consensus estimate projects a loss of 40 cents per share, narrowing from a loss of $15.33 a year ago. Wall Street expects sales to continue accelerating, with a projected gain of 29% to $336.2 million. The stock has tripled in price this year and remains in an uptrend, supported by its 10-week line.
Sector Outlook
Nextracker’s strong quarterly performance has set a positive tone for the solar power industry, with its stock reaching record highs and leading a significant sector rally. The optimistic outlook, supported by robust demand and analyst upgrades, positions the company as a key indicator for the performance of other major solar firms reporting in the coming days.
