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Is Nextracker Stock a Buy Now? | The Motley Fool

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  Published in Stocks and Investing on Saturday, November 1st 2025 at 18:33 GMT by The Motley Fool
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Is Nextracker Stock a Buy Now? A Deep Dive into the Solar Tracker Company’s Latest Performance and Future Prospects

The Motley Fool’s November 1, 2025 feature on Nextracker (NASDAQ: NEXTR) takes a comprehensive look at a firm that has steadily positioned itself at the center of the renewable‑energy supply chain. By examining the company’s recent financial results, industry trends, and upcoming catalysts, the article offers readers a clear sense of whether a position in Nextracker makes sense in the current market environment.

1. The Business at a Glance

Nextracker is a leading manufacturer of solar tracking systems that help photovoltaic (PV) farms maximize energy yield. The company’s core product—single‑axis and dual‑axis trackers—moves solar panels to follow the sun’s path, boosting the electricity produced by a plant by up to 30% compared to fixed‑tilt systems. Because most new solar farms in North America and Europe are built with trackers, Nextracker’s technology has become almost a standard part of modern solar installations.

The article lays out the firm’s business model in detail:

• Revenue Streams – Nextracker sells tracking hardware, software for control and monitoring, and installation services. The bulk of revenue comes from hardware sales, while software and services provide recurring revenue that improves margins over time.
• Geographic Footprint – While the U.S. remains the largest market, the company has grown rapidly in China and Europe, leveraging government incentives and the expansion of solar capacity in those regions.
• Competitive Landscape – Nextracker faces competition from a handful of other tracker manufacturers (e.g., Soter, SolarEdge, and KLA) but has carved out a niche by combining high‑performance hardware with a proprietary software platform that enhances maintenance efficiency.

2. Recent Financial Highlights

A key part of the article is a side‑by‑side comparison of Q3 2025 results versus the same period last year. The data shows:

• Revenue Growth – 30% year‑over‑year increase, driven largely by a 25% rise in tracker shipments and a 12% rise in service contracts.
• Gross Margin Expansion – Gross margin widened from 25.2% in Q3 2024 to 27.4% in Q3 2025, thanks in part to higher utilization of low‑cost raw materials and improved supply‑chain efficiency.
• Operating Profitability – Operating income rose from $12.8 million to $17.4 million, a 36% jump, largely attributed to better cost management and higher sales volume.
• Cash Flow & Balance Sheet – Net cash from operating activities increased to $24.3 million, providing the company with ample liquidity to invest in research & development and pay down debt. As of the end of Q3 2025, Nextracker held $112 million in cash and short‑term investments, with total debt under $30 million.

The article also highlights the company’s “backlog” metric. A backlog of $1.3 billion indicates that orders for the next 12 months already exceed the current revenue, suggesting a solid pipeline and reducing short‑term volatility.

3. Industry Drivers and Policy Impact

The piece explains how broader market forces are propelling Nextracker’s growth:

• Inflation Reduction Act (IRA) – The U.S. government’s IRA provides tax credits for solar projects that incorporate tracker technology, giving Nextracker an advantage over competitors who offer fixed‑tilt solutions.
• Net‑Zero Commitments – Major utilities and corporate investors are pledging net‑zero targets by 2035, which translates into a surge in new solar farm construction—especially in the United States, where the largest capacity additions are expected to be tracker‑based.
• Cost‑Effectiveness of Trackers – Advances in battery storage and the decreasing cost of solar panels reduce the pay‑back period for tracker systems, making them a more attractive option for developers.

The article includes a chart that projects the solar tracker market to grow from $4.6 billion in 2024 to over $8.1 billion by 2029, placing Nextracker in a “first‑mover advantage” position.

4. Upcoming Catalysts and Risks

Catalysts

1. New Dual‑Axis Product Launch – Nextracker announced a next‑generation dual‑axis tracker that promises a 5–10% higher yield in high‑latitude regions. The product launch is slated for Q4 2025 and is expected to capture a large portion of the European market.
2. Strategic Partnerships – A collaboration with a leading battery‑storage company could create bundled offerings for utility‑scale projects, adding an additional revenue stream.
3. Geographic Expansion – The company plans to enter the Australian market by the end of 2026, capitalizing on government incentives and a growing renewable‑energy pipeline.

Risks

• Material Cost Volatility – Nextracker’s hardware relies heavily on aluminum and copper, whose prices have spiked in recent quarters.
• Competition – Smaller, agile tracker makers could introduce disruptive technologies that erode Nextracker’s market share.
• Regulatory Uncertainty – Changes to U.S. or European subsidies could impact demand for tracker‑enabled solar farms.

The article weighs these factors, noting that the company’s strong balance sheet and strategic partnerships position it well to weather potential downturns.

5. Valuation Analysis

Using a discounted cash‑flow model, the Motley Fool article arrives at a target price of $68 per share for Nextracker, representing a 32% upside from the current trading price of $53.1. The model assumes:

• Projected Revenue Growth – 15% CAGR for the next five years, slowing to 8% thereafter.
• EBITDA Margin – 28% over the long term, reflecting continued margin expansion.
• Discount Rate – 8%, accounting for the relatively low risk profile of the renewable‑energy sector.

Additionally, the article compares Nextracker’s price‑to‑earnings (P/E) ratio of 24x to the industry average of 17x, arguing that the premium is justified by superior growth prospects and a more favorable risk profile.

6. Recommendation and Final Takeaway

The article culminates in a “strong buy” recommendation for Nextracker. It states that:

• The company is well‑positioned to capture a significant share of the expanding tracker market.
• Recent financials demonstrate healthy growth and improving profitability.
• Policy incentives and net‑zero commitments provide a durable tailwind.
• The valuation offers a margin of safety given the firm’s strong balance sheet and robust backlog.

Readers are encouraged to monitor upcoming earnings reports, product launches, and policy announcements, all of which could provide additional upside or downside triggers.

7. Additional Context from Followed Links

The article references a few internal links that provide deeper insight:

1. Company Financials – A link to the SEC filing (Form 10‑Q for Q3 2025) gives access to audited financial statements, offering transparency on revenue breakdown and cost structure.
2. Solar Tracker Market Report – A research report from a leading industry analyst firm that confirms the projected growth trajectory cited in the article.
3. Nextracker’s Investor Presentation – Slides from the company’s latest earnings call that detail the new dual‑axis tracker’s technical specifications and expected market penetration.

These supplementary materials reinforce the points made in the feature, giving investors a more granular view of Nextracker’s operations and strategy.

Bottom line: The Motley Fool’s 2025 analysis frames Nextracker as a compelling investment in the fast‑growing solar tracker space. With robust fundamentals, favorable policy dynamics, and a clear path to further innovation, the company is positioned to deliver continued growth, justifying the “strong buy” rating and the projected upside in its valuation model.