Nextpower (NXT +0.93%) changed its name in 2025 to better represent its current objectives. The company was formerly known as Nextracker because it made solar tracking technology. Today, Nextpower makes a suite of products for the solar power industry. There are opportunities and risks for investors to consider when looking at the company.
What does Nextpower do?
Nextpower's core business is developing the technology that enables solar power cells to track the sun. It makes hardware and software that generate recurring revenue. Tracking the sun is valuable to solar power customers because it increases the amount of energy a solar cell produces.
Image source: Getty Images.
That, however, is just one small part of a solar power project. Nextpower has expanded its products via acquisitions to also include the structural (foundations and frames) and electrical (power converters) components needed to support solar.
The move makes sense. Given that Nextpower is already selling into the solar power market, it can leverage its business relationships to gain share in the new segments it is serving.
The company's tracking technology has been the leader in the market for 10 consecutive years. It isn't much of a stretch to think that it can use its industry dominance in one product to broaden its portfolio into new areas.
How is Nextpower performing?
Nextpower's 2026 fiscal third-quarter earnings update was filled with positive news. Revenue rose 34% year over year to $909 million. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 15% to $214 million. Earnings per share rose to $1.10, from $1.03 a year earlier.
The company's backlog sat at $5 billion. Given the run rate of around $1 billion in revenue per quarter, Nextpower has over a year of work lined up. The outlook is positive, and management upped its fiscal 2026 guidance slightly for revenue, earnings, and EBITDA.
NASDAQ: NXT
Key Data Points
Still, there are risks to consider. The company's core solar-tracking business is strong, but it is still just beginning to build out the rest of its business. Execution will be important.
In the past couple of years, Nextpower has acquired eight companies. The ongoing integration of those businesses needs to go well if the company's new business strategy is going to succeed.
The big theme underlying the company's future is the ongoing global shift from dirtier power sources to cleaner and renewable energy options, such as solar. This transition seems likely to keep going for decades to come.
Increasing demand for clean energy from data center owners serving the artificial intelligence (AI) market is likely to be a key near-term catalyst. Longer term, electric vehicles will likely be an important driver of demand for energy of all kinds, including renewable power, as the world seems likely to use an all-of-the-above energy strategy.
Is Nextpower worth buying?
Nextpower appears well positioned in its market and has a clear growth plan. Those are two material positives, even though investors will have to pay close attention to management's execution on this new growth plan. What's interesting is that the stock appears to be reasonably priced despite the growth opportunity ahead.
For example, the price-to-earnings ratio (P/E) is currently around 27. That's not exactly low, but it isn't outlandish, either. For comparison, the S&P 500 index's P/E is roughly 28.
Given that the S&P 500 is trading near all-time highs, it wouldn't be fair to suggest that Nextpower is cheap. But if you are a risk-tolerant growth investor, you might find this seemingly reasonably priced stock an attractive way to play the transition to clean energy.
