Hedge funds are buying these two big tech stocks while selling two rivals
Investing.com - UBS maintained its Buy rating and $125.00 price target on Nextracker Inc (NASDAQ:NXT), citing the company’s expansion opportunities highlighted during its recent Capital Markets Day. The stock currently trades at $88.56, down 9.42% over the past week despite its impressive 164.18% year-to-date return. According to InvestingPro, Nextracker maintains a "GREAT" overall financial health score of 3.62.
The investment firm views Nextracker’s strategy to enter tangential product markets as a pathway to increase wallet share and boost profitability. UBS specifically noted the company’s move into the higher-margin inverter segment as a promising development. This expansion aligns with the company’s strong financial foundation, as InvestingPro data shows Nextracker holds more cash than debt on its balance sheet and maintains a healthy current ratio of 2.18.
This expansion into inverters provides Nextracker with an avenue for accretive capital redeployment to scale the product, according to UBS’s assessment of the company’s growth strategy.
UBS estimates that Nextracker will generate approximately $2 billion in additional earnings from its core tracker business through the end of calendar year 2030.
The firm believes this represents a significant opportunity for Nextracker to pursue further mergers and acquisitions or other capital redeployment strategies that could drive additional earnings growth.
In other recent news, Nextracker Inc. has seen several positive developments following its latest earnings report. The company delivered strong fiscal second-quarter results, with better-than-expected revenue and margins, alongside robust bookings. BMO Capital highlighted these positives, noting bookings of approximately $1.2 billion, bringing Nextracker’s total backlog to over $5 billion. RBC Capital and TD Cowen both raised their price targets for Nextracker, with RBC Capital setting a target of $96 and TD Cowen increasing theirs to $88, citing the company’s evolution into a full suite solutions provider and strong quarterly performance, respectively. RBC Capital maintained an Outperform rating, while TD Cowen kept a Hold rating. In other company news, NextGen Digital Platforms Inc. completed the first tranche of its non-brokered private placement, raising $826,000 through the issuance of units priced at $0.40 each. Each unit includes one common share and a warrant, allowing the purchase of additional shares at $0.60.
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