Nextpower (NXT 0.72%), formerly known as Nextracker, excels at its core mission. However, management has plans to grow beyond its original product focus. Over the next five years, investors will see how effectively the company executes its ambitious growth plan. Here's what you need to know.
Nextpower: The way forward
Nextpower's previous name was an appropriate one, as the company's initial focus was selling technology that allowed solar panels to track the Sun's movements. This is desirable because it helps to improve the amount of power that a solar panel can generate. Right now, tracking products are expected to make up around 87% of the company's projected $3.4 billion in revenue in fiscal 2026.
Image source: Getty Images.
That amounts to a roughly $2.85 billion contribution to the top line of the income statement, which means the rest of the company's products account for roughly $545 million. Keep those numbers in the back of your mind, because by 2030, Nextpower is aiming to grow its revenue to $5.2 billion, with just 68% of that coming from its tracking technology. So, tracking will grow from $2.85 billion to approximately $3.54 billion. The rest of the business is projected to generate $1.66 billion in revenue.
This is vital for investors to understand. The core business is expected to grow materially over the next five years, with revenue increasing by nearly 25%. That's impressive given the scale of the business. However, the revenue from the company's other lines of business is projected to triple in size. That's massive growth, and it will require both selecting the right businesses to be in and executing well on the plans to expand those operations.
Can Nextpower do it? Maybe.
This is a growth stock, so only more aggressive investors should probably be looking at it. And, as an investor, you'll want to keep a keen eye on the company's growth progress. The good news is that Nextpower is building off of a very solid foundation. For starters, there's no debt on the balance sheet and roughly $845 million in cash. That's a very positive position to be in.
Additionally, the company concluded the second quarter of its fiscal 2026 with a record backlog of approximately $5 billion. Nextpower generated revenue of roughly $900 million in the quarter, so there's over a year of work to be done. Or, to put that another way, there's huge visibility for the company's revenue stream.
NASDAQ: NXT
Key Data Points
The real question is, can the company continue to execute at such a high level as it adds new product lines to the business? Management laid out the benchmark for you to watch when it presented its ambitious growth projections. Now it needs to execute on those plans.
The idea is to stick close to the company's core, which is logical. To date, management has utilized acquisitions to expand its scope. Software, structural components (frames and foundations), and electrical components (inverters) are where the significant growth is expected to come from. Those are all products and services that it can sell to customers who would also buy its tracking technology.
Worth a look for the right investor
Nextpower has a strong foundation as it attempts to aggressively build out new business lines. If everything goes as planned, the next five years could be a very exciting period in the company's history. However, strong execution will be vital, and only time will tell if management can meet its ambitious goals.
That said, with a price-to-earnings ratio of just under 24, the stock appears fairly reasonably valued. While conservative investors probably won't be interested here, growth investors should probably take the time for a deep dive.
