Is Nextracker Stock a Buy Now?

Nextracker (NXT -0.48%), a leading producer of solar tracking systems, went public at $24 per share on Feb. 8, 2023. Today, its stock trades at about $73. That rally was fueled by the warming solar market, which boosted its bookings, margins, and profits.

But should investors still buy Nextracker’s stock after that massive rally? Let’s review its business model, growth rates, and valuations to decide.

Image source: Getty Images.

What does Nextracker do?

Nextracker’s solar tracking systems automatically orient solar panels to follow the sun. It held 26% of that market in 2024, according to research firm Wood Mackenzie, putting it in first place ahead of Arctech Solar, GameChange Solar, PV Hardware, and Array Technologies.

Solar tracking systems can increase the energy output of solar panels by 15% to 25% compared to older fixed-tilt mounting systems. That makes them popular upgrades in sunny areas like the Southwest U.S., the Middle East, India, and Latin America.

From fiscal 2022 to fiscal 2025 (which ended this March), its revenue grew at a compound annual growth rate (CAGR) of 27%, from $1.46 billion to $2.96 billion. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased at a CAGR of 103%, from $92.3 million to $776.5 million, which boosted its adjusted EBITDA margin from 6.3% to 26.2%.

On a generally accepted accounting principles (GAAP) basis, its net income surged tenfold from $50.9 million in fiscal 2022 to $509.2 million in fiscal 2025. That explosive growth was driven by cheaper solar modules, decarbonization mandates, and more generous policy incentives — all of which sparked the installations of more solar panels worldwide.

How much bigger could Nextracker grow?

According to Goldman Sachs, the total power produced by global solar installations could rise 57% from its 2024 levels to 914 gigawatts (GW) in 2030. Markets and Markets predicts the global solar tracker market will expand at a CAGR of 17.3% from 2024 to 2029 as more companies maximize the efficiency of their solar panels.

To maintain its lead and widen its moat against its smaller competitors, Nextracker has been investing in new artificial intelligence (AI) and robotics technologies. It already uses AI to analyze data and automatically adjust its panels for weather conditions, but it beefed up that platform with its acquisitions of Onsight Technology (which provides autonomous robotic inspection and fire detection tools for solar power plants), SenseHawk’s IP for high-resolution 3D maps, and Amir Robotics (an automated cleaning technology for big solar sites) over the past year. It also recently agreed to buy Origami Solar, a producer of solar panel frames, for $53 million.

Nextracker still had a massive backlog of $4.75 billion at the end of the first quarter of fiscal 2026. For the full year, it expects its revenue to rise 8% to 17% to between $3.2 billion and $3.45 billion — but it predicts its adjusted EBITDA will come in nearly flat between a 3% decline and 4% growth. It expects its recent acquisitions, its increased investments in AI and robotics, higher input costs, and its expansion into lower-margin overseas markets to compress its near-term margins.

From fiscal 2025 to fiscal 2028, analysts expect Nextracker’s revenue and adjusted EBITDA to increase at a CAGR of 12% and 8%, respectively. Those growth rates are stable, but they might lag analysts’ expectations for the broader solar tracking market. We should take that cautious outlook with a grain of salt, but it implies that Nextracker’s business is maturing. Its recent streak of acquisitions also suggests it’s running out of ways to organically grow its business.

Is it the right time to buy Nextracker’s stock?

With an enterprise value of $9.72 billion, Nextracker’s stock still looks reasonably valued at 12 times next year’s adjusted EBITDA. Its smaller rival Array trades at just 5 times next year’s adjusted EBITDA, but its business shrank over the past two years as Nextracker’s expanded.

Nextracker probably won’t replicate its massive post-IPO gains over the next few years. But if it continues to dominate its niche solar tracking systems market, it should have a bright future as the global solar market expands. That’s why I believe it’s still worth buying at these levels.