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Issue #77: A Highly Profitable Rising Star In Renewables And A Construction Company With Zero Debt


Nextracker Inc. produces solar tracking systems that enable solar panels to follow the sun's path throughout the day, capturing more sunlight than fixed-position panels. Founded in 2013, Nextracker has grown to now have over $8 billion in market cap, boasting billions in revenue and growing profitability. The solar tracker market is expected to grow at a 7% CAGR to 2031 – representing a massive opportunity for Nextracker, which is the first US company to have delivered 100-gigawatts (GW) in shipments. For FY24 alone, the company already has over $4 billion worth of sales in backlogs.

Argan, Inc. is a long-standing company that operates in the power infrastructure and construction industry, providing solutions for power generation and industrial projects. It has been profitable since 2009 and began paying out dividends every year since 2011. While Argan’s revenue and net income levels have remained stagnant in recent years, the company’s balance sheet has boasted zero debt since 2011. With a high backlog of orders and strong industry tailwinds, analysts see potential upside for $AGX despite its share price up by 80% over the year.

Nextracker ($NXT)

$54.79 – Share price at time of writing

Source: tradingview.com


  • Share price at the time of writing: $54.79
  • Nextracker ($NXT) manufactures solar tracking systems that allow solar panels to follow the sun's path throughout the day, capturing significantly more sunlight than fixed-position panels.
  • The company operates in the renewables sector, specifically in the solar tracker industry. This industry is set to grow at a 7% CAGR in the next few years, representing over a $71 billion market opportunity.
  • Nextracker generates billions in revenue and has grown net income by over 130% per annum in the last two years. The company already has $4 billion worth of sales backlog for FY ‘24.
  • $NXT has hit all-time highs recently and consensus price target shows slightly more potential upside – its strong balance sheet, focus on hardware and software in a rapidly growing niche does however make it a very interesting stock to watch.

What they do:

Nextracker is a leading company in renewable energy, known for its advanced solar tracking systems that help solar panels capture more sunlight by following the sun's movement throughout the day. This technology boosts the amount of energy solar panels produce, making them much more efficient than traditional fixed-position panels.

Nextracker generates revenue primarily through the sale of its products. These include NX Horizon, its flagship solar tracking system, and NX Gemini, its two-in-portrait format tracker that holds two rows of solar panels along a central support beam. 

The company also offers software and data analytics solutions to optimize solar system performance, as well as maintenance and support services to ensure long-term reliability. This combination of hardware, software, and support services forms the basis of Nextracker's revenue model.

However, Nextracker only has one operating and reportable segment, instead choosing to break down its revenue by geography. Last year, Nextracker earned 68% of its revenues in the US and the remainder from the rest of the world.

The company’s customer base include some of the largest engineering and construction firms and solar project developers in the world. Many of its customers build multiple projects at a time and make purchases on a per-project basis.

Founded in 2013, Nextracker ($NXT) became a publicly listed company on the Nasdaq early last year.

What the market is saying:

$NXT has seen a significant uplift in social media mentions recently. Its stock price hit an all-time high in February – it did only go public a year ago – and is currently back at that same price level. It seems that $NXT’s recent number of mentions also correlate to its share price movement.

Source: quiverquant.com

Based on forum discussions, many agree that Nextracker has strong growth potential. On the contrary however, some remain skeptical of its technology.

Recent comments from Reddit:

NXT shares were up by 24.8% today to $56.50. They corrected sales guidance up by $100 million to $2.45 billion, EBITDA up by $73 million to $488 mil for FY 2024. Very strong order book, balance sheet, cash on hand. 70% of business in the US, 30% overseas, so a nice balance. Experienced, long-term management team with a strong track record on execution.

  • Winkelschleifer

I like this one, been passively following since the flex spinout, need to do more research. Noticed the CEO bought a bunch of stock in Dec. How much of the “system” is hardware vs how much is software? This seems way too cheap if they can exercise software-style pricing power.

  • Facebook

Why $NXT  could be valuable:


Nextracker operates in the renewable energy industry, specifically focusing on solar energy technology. As countries, industries, and companies strive to reduce their carbon footprints and meet aggressive decarbonization targets, the demand for renewable energy is rising. The growing use of electric vehicles and the shift from natural gas to electricity in buildings are also expected to increase the demand for energy production, including solar energy.

Nextracker estimated nearly 7,000 solar projects in the queue in the US last year – 25 times that of gas projects. This does not even include those outside the country, and the company has over 80 manufacturing partners across five continents. The level demand is further supported by Nextracker’s latest quarterly report showing a significant order backlog that’s expected to bring in $4 billion in sales in FY '24.

Looking further, the solar tracker market is crucial in supporting the global shift to renewable energy by boosting energy production and improving the levelized cost of energy (LCOE). Most utility-scale projects in established markets like the United States, Latin America, and Australia use solar trackers, and Nextracker claims that this technology is gaining traction in emerging solar markets such as the Middle East and Africa. 

According to Wood Mackenzie, the global solar tracking market (not including China) is expected to grow at a CAGR of 7% until 2031. This would represent a $71 billion cumulative opportunity from 2020 to 2030, with an estimated 682 GW of solar capacity installed during this period. For reference, Nextracker has delivered just about 100 GW since its inception in 2013.


Despite being a relatively young company, Nextracker already boasts billions in revenue and has been steadily growing profitability. It’s consistently increased revenues in double-digit growth levels since the beginning of 2022, while net income has grown more than 130% per annum over the last two years.

$NXT TTM revenues per quarter from start of 2023 to 1 April 2024:

Source: macrotrends.com

As an infrastructure company that sells tangible products, $NXT has higher costs of goods sold than companies from some other industries. Despite that, it has grown gross margins from 20% to 30% year-on-year as per its latest quarterly earnings report. This effect has trickled down its overall profitability, almost doubling its earnings margin from FY’23 to FY’24

$NXT quarterly net income over the last year:

Source: macrotrends.net

$NXT’s cash flow statement and balance sheet also have numbers that are nothing short of impressive for a younger company. In FY’23, it generated $108m cash from operating activities and only spent $3m in investing activities. These numbers get even better in FY’24 – Nextracker earned a net $429m in cash from operating activities while only spending $6.7m in investments. This shows strong free cash flow, which Nextracker has since used to pay down some of its liabilities and buyback shares.

Meanwhile, $NXT’s balance sheet shows its current assets more than enough to cover its total liabilities. This signifies strong liquidity and lower concerns for solvency issues in the long-term.

Price action

As mentioned, Nextracker is currently tracking at all-time high stock price levels. It is up approximately 90% since it listed in February 2023. Despite that, the current consensus analyst price target of $61.33 shows slightly further potential upside.

What the risks are:

1️⃣ Short history as a publicly-listed company: $NXT only debuted on public markets last year, which means that publicly available financial statements and disclosures are limited.

2️⃣ New tariffs: Nextracker has cited that changes in existing exemptions or the implementation of new tariffs is one of its risk factors. As an example, Nextracker noted that the recent tariffs on steel may impact its margins. 

3️⃣ Trading near its all-time highs: $NXT is trading near its all-time highs and is up about 40% over the last year. While analyst consensus shows further potential upside, the current stock price levels may be a higher barrier to enter.

Bottom line: Nextracker is a market leader that operates in an industry set for strong growth. Despite its short history, the company has already expanded exponentially, is profitable and has a robust balance sheet and strong cash flow. Its sales backlog shows promise for further growth over the next year, at minimum. While $NXT is trading close to its all-time highs, price targets show potential for further upside.

Argan ($AGX)

$75.45 – Share price at time of writing

Source: tradingview.com


  • Share price at the time of writing: $75.45
  • Argan ($AGX) has a long history of delivering engineering, procurement, and construction (EPC) services for power generation and renewable energy projects.
  • Argan has recorded consistent profitability since 2009 (save for 2020 when the COVID-19 pandemic struck) and has rewarded investors with regular dividends and a share buyback program.
  • While Argan’s revenues have stagnated a bit in recent years, the infrastructure company has boasted a balance sheet with zero debt since 2011.
  • $AGX is up over 80% in the last 12 months. The consensus analyst price target shows that $AGX is close to its fair value.

What they do:

Argan ($AGX) provides engineering, procurement and construction (EPC) services for power generation and renewable energy projects. The company specializes in natural gas-fired power plants and renewable energy facilities like wind and solar power. 

Argan handles every aspect of project development, from design and equipment procurement to construction and management, offering efficient turnkey solutions that reduce risk for clients. The company mainly operates through its subsidiaries Gemma Power Systems (GPS), Atlantic Projects Company (APC), The Roberts Company (TRC) and Southern Maryland Cable (SMC). 

It has three reportable segments:

  • Power industry services: Argan’s two subsidiaries, GPS and APC, provide the company’s power industry services. This is Argan’s EPC segment, which includes services like designing, building and commissioning large-scale energy projects. This segment generated the highest percentage of Argan’s total revenue last year.
  • Industrial construction services: This is where the TRC subsidiary operates, provides field services and project management to support new plant construction and maintenance services for industrial plants. This segment grew the most out of the three, year-on-year.
  • Telecommunications infrastructure services: Argan provides telecommunications infrastructure services through its SMC subsidiary. It’s Argan’s smallest segment but had the highest gross margins last financial year.

Argan secures long-term contracts with utilities and independent power producers, which often include ongoing maintenance and support services to ensure a steady revenue stream. While based in the US, Argan also works on international projects in the UK and Ireland, tapping into global markets that need new power generation capacity. 

What the market is saying:

$AGX gets few mentions on public forums, with only a few stock deep dives posted from time to time. The discussion tends to focus on Argan’s fundamentals and valuation but there are also mentions of its technical stock performance.

Source: quiverquant.com

Some comments from Reddit:

“I looked at this a while ago and of course also noticed the great balance sheet and high inside ownership.”

– fierce_beast

It's flush with cash, has no debt, trading at an EV/EBITDA around 2.5x… seems like a pretty low hanging fruit.”

– value_investing_guy

Why $AGX could be valuable:


Argan operates in the power infrastructure and construction industry, providing solutions for power generation and industrial projects. The company is heavily involved in the construction and maintenance of power generation facilities, such as natural gas-fired plants and renewable energy installations like wind and solar power.

This makes Argan a key player in the global transition to renewable energy. The global power generation market alone is expected to grow to $3.9 trillion by 2032 – up from $1.8 trillion in 2022. That’s an estimated 8% CAGR in the next eight years. 

This expected growth is also in line with Argan’s expectations of electricity demand to surge with AI and data centers, electric vehicles and solar battery factories being the key factors. Argan had a project backlog of $824m at the end of Q1 2025 for projects continuing on until at least 2026.


$AGX has been listed on the NYSE since 1995, and has been consistently profitable since 2009 (excluding 2020 when things were affected by the pandemic). Argan recorded its highest revenues and income in 2017 and 2018, which has since gone down slightly, but still higher than before those years. 

$AGX TTM revenues per quarter from 2009 to 2024:

Source: macrotrends.com

$AGX TTM net income per quarter from 2009 to 2024:

Source: macrotrends.net

While Argan's income statement may not be particularly exciting, its balance sheet stands out as exceptionally strong and impressive.

Despite being in the infrastructure sector, Argan has boasted zero debt since 2010. This includes both short and long-term debt. What this means is that Argan does not have any interest expense and also has very little risk of insolvency. Rather, in recent years, the company has even received interest income from some investments. The bulk of its liabilities are instead unearned revenue – in other words, prepaid revenue from customers for products or services that have not yet been provided. 

Thanks to this, coupled with strong cash flow, Argan has commenced a share buyback program worth $125 million, expected to continue until 2027. Additionally, $AGX paid out dividends every year since 2011.

Price action

$AGX has seen tremendous growth in its share price over the last year, currently up over 80%. It recently recorded a new historical share price high of $78.95, beating its previous record in 2017. The mean analyst price target is $77.50 at the time of writing, implying that $AGX’s current share price of $75.45 may just have slightly more to go before reaching its fair value.

What the risks are:

1️⃣ Dependence on Key Contracts: Argan relies on securing large contracts for its EPC services. The loss of key contracts or clients, or the inability to secure new projects, could significantly affect revenue and financial stability.

2️⃣ Stagnating growth: $AGX is a relatively mature company that saw its revenues and net income peak in 2018. Since then, it has seen revenue fluctuate within a similar range. The company has not provided specific guidance on its expected growth in the coming years.

3️⃣ Technological Changes: Rapid advancements in technology could render existing solutions obsolete. Argan must continually invest in new technologies and innovations to stay competitive, which can be both costly and risky.

Bottom line: Argan has a very long history of profitability with zero debt. This has allowed Argan to reward investors with a share buyback plan and consistent dividends. While the company has not seen record-breaking numbers in recent years, its backlog of projects, strong balance sheet and industry tailwinds gives it the financial stability to keep going. $AGX has recently broken a new share price record, but despite that it may still have room to grow.

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