296 289 292 318 341 339 338 440 403 467 513 518 480 573 710 737
That’s the full 4-year revenue history. While the last 2 quarters look great, I would point out that YoY growth in Q3 last year (from 338m to 513m) was 52%…and then they grew at sub-20% for a couple quarters. It’s lumpy.
They had some adjustments (including a big one from tax credits helping them in Q4), so the adj EBITDA was:
84 → 110 → 168 → 160
A little flatter, and Q4 actually took a step back rather than exploding higher. And in the call they discussed how their adjusted Gross Margin was 30% in Q3 and Q4, but that they’d be lowering prices and even with the tax credits they only expect a high-20’s GM this coming year. They talked about expected pricing pressure.
For the full year, GM was 28% of revenue and EBITDA was 21% of revenue. Sounds unlikely they’ll wring out more in either place. So profits will grow about like revenue does.
That is awesome news for volumes, but I think they’ve probably already seen some of this included in Q4 (ending March) revenue, and probably Q3 (Q ending December) too…installer customers buying stuff in Oct-Dec that would be actually installed in 2024. These were NXT’s two $700m+ revenue quarters, a big jump. Seems plausible this 2024 demand was part of that.
Revenue grew 21.9% in f2022, 30.5% in f2023, and 31.4% in f2024. If they can grow that fast again, and keep margins, I would expect the stock to do pretty well. It’s just maybe not as exciting as I’d hoped it would be when I started looking into it. With a PE in the teens, it’s not crazy expensive, so you could hope for a little multiple expansion, but I wouldn’t bet on it with a solar stock, as investors probably won’t overlook the always-falling sales prices in the solar world.
That pricing pressure is what will keep me out, but to anyone who wades in, I hope they crush it for you!
And this goes without saying, but please correct me if I’m missing something!
Bear