5/14/24 - $nxt - long the print, tough sector... but best horse
5/14/24 - vrockstar -
NXT
- industrial solar w/ unique IP/ solution and the best industry growth likely has the fewest overhangs as well as bagholders involved. while anyone can see rates picture limits investments industry-wide, these guys should continue to grow through the '24 trough (not the case for... any other solar i can find, esp the consumer ones). 14x next year EPS isn't cheap, esp bc we aren't growing much beyond DD+. Also FCF seems to be nicely flowing down from NI without a ton of obvious dilution, but 3-5% yield isn't "great" (it usually isn't for co's that are winners bc the stocks are expensive for a good reason - they can continue to compound and grow into these valuations). so this hinges on the Q and the beat vs. miss. if there's even a small indication that growth is possibly lower going fwd, i could easily see the stock down double digits+ and this would be an excellent way to play the print on the long front without taking excess risk. however, similar to my call on $NASDAQ:ONON, i see more likelihood that the # looks better and it's a hiding spot with look-thru risk and possibly the best in class name right now in solar that will command super-premium multiples as we approach rate cuts in 2H of the year and so the '25 stock tgt all else equal could easily be ATH+ which i think is >50% scenario vs. a 50% decline here in the meanwhile (and if it's macro related - this is also an obvious place to average into a lower basis). not the most obvious setup b/c they *do* have 30% of the capital stack as debt which is a no-go in this tape, or a real negative factor impacting stonks that miss or don't really beat. however, i'm willing to overlook b/c the growth engine + cash gen + outlook appears to be there.
NXT
- industrial solar w/ unique IP/ solution and the best industry growth likely has the fewest overhangs as well as bagholders involved. while anyone can see rates picture limits investments industry-wide, these guys should continue to grow through the '24 trough (not the case for... any other solar i can find, esp the consumer ones). 14x next year EPS isn't cheap, esp bc we aren't growing much beyond DD+. Also FCF seems to be nicely flowing down from NI without a ton of obvious dilution, but 3-5% yield isn't "great" (it usually isn't for co's that are winners bc the stocks are expensive for a good reason - they can continue to compound and grow into these valuations). so this hinges on the Q and the beat vs. miss. if there's even a small indication that growth is possibly lower going fwd, i could easily see the stock down double digits+ and this would be an excellent way to play the print on the long front without taking excess risk. however, similar to my call on $NASDAQ:ONON, i see more likelihood that the # looks better and it's a hiding spot with look-thru risk and possibly the best in class name right now in solar that will command super-premium multiples as we approach rate cuts in 2H of the year and so the '25 stock tgt all else equal could easily be ATH+ which i think is >50% scenario vs. a 50% decline here in the meanwhile (and if it's macro related - this is also an obvious place to average into a lower basis). not the most obvious setup b/c they *do* have 30% of the capital stack as debt which is a no-go in this tape, or a real negative factor impacting stonks that miss or don't really beat. however, i'm willing to overlook b/c the growth engine + cash gen + outlook appears to be there.
Comment:
the guide would be the bogey that drives shares here, w/ a ~10% increase to midpt v consensus. this high flyer should be clear for takeoff. if tmr's CPI print moves stonks higher, this should be >10% higher, minimally. any dips should be bought up quickly.
Comment:
and i'm out for the +12% AH at slightly above $48 which puts the stock at 15x this year. while next year ests should probably rise based on this sequential revenue beat (and it seems to me mgmt is sandbagging the FY guide on EPS and rev)... this remains expensive all else equal. so if we do get a bid to solar, to risk, to rates etc.. then this remains my choice for fastest horse. i'd not even mess w/ the others tbh. i'm taking the W (and helps offset the L in DLO i took AH) and will be dip buying the AM should we see sub $45 again. trading stock for now. going large on any macro/ beta risk off situation that sucks this sub $40. at that point, i feel confident in YE profits.
Comment:
i'm back. starting a small position here sub $45 as planned two days ago. looking to get bigger if/as we cross the earnings gap chasm. remains best in class. not cheap, but you won't typically get something that's beating by such a wide mgn vs. peers at a cheap price or you should be skeptical. be safe fam. comment if u have more insights on this one. would like to wrangle a larger bag in time. gl to all.