Why NXT Is Jumping for a Second Straight Day

Nextracker (NXT) is climbing for a second straight day after reporting much better-than-expected fiscal third-quarter results on Tuesday after the market closed. Additionally, yesterday the shares were upgraded to Overweight by British bank Barclays.

NXT markets trackers for solar panels.

Why Barclays Upgraded NXT

Barclays raised its rating on NXT to Overweight from Equal Weight. After the firm increased its adjusted earnings per share guidance for the full year to $3.75-$3.95 from $3.10-$3.30, the bank predicts that the company’s actual adjusted annual EPS will be at the high end of the guidance range or even above it.

A photovoltaic field at dawn, its solar panels shimmering in the light of a new day.

Additionally, after Barclays raised its estimates for next year, NXT is trading at a lower valuation than Array (ARRY), its closest publicly traded competitor. Conversely, Barclays believes that NXT’s valuation should be at least double that of ARRY, given what the bank sees as NXT’s “flawless” execution in a tough macro environment.

Finally, Barclays believes that NXT reported strong gross margins, and it raised its price target on the name to $60 from $47.

The Recent Price Action of NXT Stock

In the last month, the shares have advanced 31%, while they are up 30% in the last three months.

While we acknowledge the potential of NXT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NXT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.