Company Reports

We attended the RE+ conference and trade show in Anaheim, California. The conference and exhibit hall provided an opportunity to meet with companies as well as see latest product unveilings. We highlight our key takeaways below.

Nextracker is the world’s largest manufacturer of smart tracker systems for utility-scale solar projects globally.

Nextracker’s first-quarter fiscal 2025 results were in line with our expectations. At first glance, we expect to maintain our $37 fair value estimate when we update our model. We continue to view shares as slightly overvalued based on our opinion that gross margins will moderate in the long term.

No-moat Nextracker continued its trend of strong financial results and released fiscal 2025 guidance in line with our estimates. We plan to update our model in conjunction with the 10-K filing in the coming weeks, but at an initial glance, we see no reason to change our $37 fair value estimate. We reiterate our nonconsensus view that long-term margins will moderate from recent levels.

We increase our fair value estimate for no-moat Nextracker to $37 per share from $34 after fiscal 2024 third-quarter results. Driving our higher valuation is a slight boost to our gross margin forecast. However, we continue to forecast moderating margins long term. At current prices, we view shares as overvalued as we believe investors are extrapolating recent margin outperformance to continue indefinitely.

Nextracker is the world’s largest manufacturer of intelligent tracker systems for utility-scale solar projects globally.

Nextracker is the world’s largest manufacturer of intelligent tracker systems for utility-scale solar projects globally.

We initiate coverage of Nextracker with a no-moat rating, $34 fair value estimate, and a Very High Morningstar Uncertainty Rating. Nextracker benefits from robust profitability and a strong management team, but we believe margins are approaching peak levels and view shares as overvalued.