Why Nextpower Stock Rocked the Market Today
Key Points
It published its final quarterly earnings report for fiscal 2026, and announced an acquisition.
Investors were particularly pleased by the estimates-trouncing quarter.
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Nextpower (NASDAQ: NXT) was providing its investors with some powerful gains on Wednesday. Those folks traded the solar infrastructure company's sock up by over 9% that day. That followed its release of estimates-crushing fiscal fourth quarter results, combined with the announcement of a fresh acquisition.
A fine fiscal year
Nextpower would have attracted attention simply for the fact that it booked new revenue and earnings records in the entirety of fiscal 2026. This, despite the fact that the company's fourth quarter top line actually fell, slumping by nearly 5% to $881 million.
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Net income not under generally accepted accounting principles (GAAP) also declined, falling 16% to $162 million, or $1.05 per share.
Regardless, Nextpower surprised analysts on the upside. Prognosticators tracking the stock were modeling revenue of less than $830 million and non-GAAP (adjusted) net profit of only $0.93.
In its earnings release, Nextpower attributed the better-than-expected performance to a broadening of its business. It also raised certain guidance items for the entirety of fiscal 2027, including revenue (lifted to $3.8 billion to $4.1 billion, from $3.6 billion to $3.8 billion). It maintained its adjusted net income forecast of $4.21 to $4.59 per share.
$80.5 million reasons to be satisfied
In line with that expansion strategy, Nextpower also announced that it has signed a definitive agreement to acquire Apex Power, a business specializing in power conversion technology. Nextpower will also receive assets complementary to its power conversion operations from Apex's owner, Spain-based Zigor.
Nextpower is to spend up to $80.5 million in the deal, $46 million at its closing, and potentially $34.5 million in earn-outs. This will be transacted entirely in cash.
I feel that both of the company's Wednesday news items are quite positive developments. The company is very profitable -- which is rare in the solar industry -- and the Zigor deal will undoubtedly give its power conversion business more muscle. In fact, at this point, we can even consider Nextpower one of the better stocks in the broader solar sector these days.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nextpower. The Motley Fool has a disclosure policy.
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