Nextracker (NXT) sits at the heart of one of the most important transitions of our time: the shift to clean, low-cost renewable energy. As the world scales solar at record speed, Nextracker’s smart solar tracking systems are becoming essential infrastructure—boosting energy output, lowering project costs, and strengthening grid reliability. For investors, NXT offers a blend of strong growth prospects, compelling economics, and a clear positive environmental impact that makes it a standout candidate in the Good Stocks universe.
The company combines high structural demand with rising profitability, excellent capital efficiency, and a rapidly expanding addressable market. Meanwhile, its Impact Score of 83 (“Profound”) reflects meaningful leadership in climate action and responsible corporate conduct.
The Return Case
NXT benefits from robust industry growth (solar expected to grow 8–10% annually), strong projected revenue and EPS expansion, and improving profitability metrics. With analysts forecasting 13% upside and a top-tier Ziggma Score of 99, the stock has a well-supported potential to appreciate over the next 12–24 months.
The Impact Case
As a critical enabler of clean energy, Nextracker directly accelerates global emissions reduction. Its Climate Action score of 95 reflects excellent alignment with climate goals, making NXT a business whose core product creates measurable positive environmental impact.
Building the smart solar infrastructure that powers the renewable energy revolution
Nextracker designs and manufactures advanced solar tracking systems used in utility-scale solar installations. Its smart tracking platforms—including NX Horizon and TrueCapture—use sensors, machine learning, and intelligent software to optimize panel positioning as sunlight shifts throughout the day. This increases solar array output by 1–3% on average, translating into substantial gains for developers and utilities.
The company also provides digital monitoring tools, design software, and performance analytics, creating a full-stack ecosystem that enhances long-term project efficiency and reliability.
Solar is currently the fastest-growing technology in the global power sector. According to multiple industry sources, annual solar additions could double within five years, driven by falling costs, government incentives, and the massive electricity demand associated with AI workloads and data centers. Nextracker’s market position is defensible thanks to its scale, proven technology, deep customer relationships, and strong track record across diverse geographies and climates.
Strong fundamentals and improving profitability underpin NXT’s value creation potential
Nextracker’s financial trajectory highlights a business scaling efficiently as global demand accelerates. Revenue continues to grow at attractive rates—21.9% in FY22, 30.5% in FY23, and 31.4% in FY24, with growth staying positive into FY25. Profitability has expanded meaningfully: EBITDA margin increased from 5.3% in FY22 to over 25% in FY24, and is expected to remain healthy at 22–23% in FY25. Net profit margin followed a similar path, rising from just 3.5% in FY22 to nearly 20% in FY24.
Return on equity is strikingly robust for a manufacturing-heavy business, jumping from 10% in FY22 to 67% in FY24, before moderating at 39–40% on forward estimates. These metrics reflect effective operating leverage and strong capital management.
Nextracker’s balance sheet is also solid, with minimal net debt and a current ratio above 200%, providing ample flexibility for expansion, geographic diversification, and supply-chain strengthening. The company’s cash generation continues to improve, with operating cashflow increasing sharply in FY24 and expected to remain elevated.
Valuation remains reasonable relative to growth. With a forward P/E of 21x and industry growth above 8%, NXT trades at a growth-adjusted multiple that appears justified—and arguably attractive—given its long-term exposure to renewable energy demand. Analysts’ price target implies 13% upside, and with solar adoption accelerating alongside AI-driven power demand, upside optionality could expand further.
A business model fundamentally aligned with global decarbonization
Few companies have as direct an impact on emissions reduction as Nextracker. Every gigawatt of solar capacity installed using its tracking technology increases renewable energy production, lowers grid carbon intensity, and reduces reliance on fossil fuels. This central role in the clean-energy transition underpins Nextracker’s strong Impact Score of 83.
1. Climate Action: Exceptional alignment with a low-carbon future
With a Climate Action score of 95, NXT ranks among the top companies in the electronic equipment category. A standout metric is its Global Warming Potential score of 100, reflecting a lifecycle carbon footprint that aligns with a 1.3°C pathway. This signals that Nextracker not only enables clean energy—it also manages its own climate impact responsibly.
2. Responsible operations and data governance
NXT earns strong marks in Privacy & Data Management (78) and has a perfect Fines & Violations score of 100, suggesting a disciplined approach to compliance, stakeholder engagement, and overall corporate accountability. Though some labor and recycling metrics leave room for improvement, the company’s overall impact remains overwhelmingly positive due to its foundational role in the clean-energy buildout.
A structurally growing market + improving margins = a compelling compounding story
Nextracker’s investment case rests on three core pillars:
- Structural demand for solar: Global renewable installations are set to accelerate significantly, driven by decarbonization, electrification, and rising AI power needs.
- Profit expansion: NXT continues to scale margins through manufacturing efficiencies, product mix optimization, and software-driven services.
- Attractive valuation and analyst support: With a forward P/E of 21x and double-digit revenue and EPS growth expectations, NXT is well positioned for multiple expansion and sustained share-price appreciation.
A rare blend of return potential and climate impact
Nextracker stands out as a high-quality company operating at the center of one of the world’s most powerful megatrends. Its strong financials, improving profitability, and leadership in smart solar technology create a compelling long-term return profile. At the same time, its essential role in scaling global renewable energy makes it a model example of a company that delivers both financial value and positive environmental impact. For investors looking to do well and do good, NXT deserves a place on the shortlist.
We believe the information contained in this text to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions available data and are subject to change without notice. Please consider your full financial situation prior to making an investment decision.