Energy
Monday, February 5th, 2024 3:44 pm EDT
Key Points
- Solar Growth Trajectory: Nextracker’s CEO, Dan Shugar, asserts that solar power is poised to double every two to three years, fueled by an unprecedented surge in demand for new electricity generation. Shugar deems solar as unstoppable, citing phenomenal intrinsic economics, particularly in utility-scale projects in both the U.S. and overseas.
- Financial Success and Market Outperformance: Nextracker’s stellar financial performance, exceeding Wall Street’s expectations, raising guidance, and reporting a record order backlog, has propelled its stock to close nearly 25% higher. Since its successful initial public offering in February 2023, the company has consistently beaten earnings expectations and outperformed the solar sector, with its stock up about 24% while the Invesco Solar ETF is down nearly 21%.
- Driving Factors and Forecast: Shugar attributes Nextracker’s success to the growing demand for electricity, driven by data centers, electrification, and reindustrialization in the U.S. The company’s fiscal third-quarter revenue has grown 38% year over year to $710 million, with a significant order backlog exceeding $3 billion. As the demand for electricity continues to rise, Shugar predicts solar’s compound annual growth at 26% over the next five years, making it the leading source of U.S. electricity generation in a decade. Nextracker has raised its revenue forecast for fiscal 2024 to a range of $2.43 billion to $2.48 billion and increased its net income guidance for the year.
Nextracker’s CEO, Dan Shugar, believes that solar power is on an unstoppable trajectory to double every two to three years, driven by an unprecedented surge in demand for new electricity generation. The company, which manufactures systems for solar panels to track the sun, reported strong financial performance, exceeding Wall Street’s expectations, raising its guidance, and boasting a record order backlog. Despite challenges in the solar industry, Nextracker has outperformed, with its stock up around 24% this year, while the Invesco Solar ETF is down nearly 21%. The company’s fiscal third-quarter revenue grew 38% year over year to $710 million, with an order backlog exceeding $3 billion. Shugar attributes this success to the growing demand for electricity driven by data centers, electrification, and reindustrialization in the U.S. He predicts solar’s compound annual growth at 26% over the next five years, making it the leading source of U.S. electricity generation in a decade. Nextracker has raised its fiscal 2024 revenue forecast to $2.43 billion to $2.48 billion and increased its net income guidance. Despite potential headwinds from geopolitical risks and the 2024 presidential election, Shugar remains optimistic, citing the resilience of tax provisions supporting the solar industry and the company’s investments in domestic manufacturing across political spectrums. However, he acknowledges the impact of shipping disruptions in the Red Sea and drought affecting the Panama Canal, leading to increased logistics costs and delayed shipments of materials. While manageable for now, Shugar expresses concerns about the escalation of global conflicts affecting markets and financing.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/02/nextracker-ceo-says-solar-is-unstoppable-as-market-sees-unprecedented-demand-growth-.html
