Key Takeaways
- Nextpower jumped 15% today after Jefferies made it a Franchise Pick in GE Vernova’s place.
- Nextpower raised its guidance last week, yet three firms cut their price targets the next morning.
- Nextpower’s forward multiple is far below GE Vernova’s, which makes it the better buy of the two.
- The main risk is margins, which management expects higher costs to squeeze in the second half.
Nextpower (NXT) stock jumped 15% today after Jefferies analyst Julien Dumoulin-Smith added it to the firm’s Franchise Pick list and took GE Vernova (GEV) off the list to make room.
That’s a quick change of heart. Nextpower reported a record quarter last Wednesday, and three firms cut their targets the next morning anyway.
Guidance went up
In its fiscal second quarter, revenue rose 22.5% from a year earlier to $1.11 billion, and adjusted EPS of $1.31 beat the $1.10 consensus. Record bookings pushed the backlog above $6 billion.
Management also raised its fiscal 2027 guidance to $4.20-$4.45 billion of revenue and $4.61-$4.87 of adjusted EPS, up at both ends.
Analysts expect earnings growth to speed up after this year:
The $4.79 consensus for fiscal 2027 sits a bit above the new range’s midpoint, and it climbs about 20% a year to $6.96 in fiscal 2029.
TIKR tracks 29 analysts on Nextpower. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nextpower, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nextpower’s Analyst Ratings
Jefferies picked the cheaper stock
On Thursday, Mizuho cut its target to $98 from $101, Roth Capital to $140 from $175 and Needham to $143 from $149. The stock’s multiple had already come down hard:
Nextpower closed Friday at 16x forward earnings, below its three-year average of 18x and less than half its May peak. Today’s jump only takes it back to about average.
Analysts’ targets still sit well above the stock:
The $128 consensus target was 62% above Friday’s close, and about 40% even after today’s jump.
GE Vernova’s own quarter gave Jefferies no reason to leave: third-quarter orders rose 96% organically to $29.3 billion, backlog hit $197 billion, and it raised its 2026 guidance on Oct. 28. But its stock is up 49% over the past year and closed Friday at 37x forward earnings.
My read: Jefferies is swapping a power-buildout winner investors already pay up for into one they’ve marked down. How much higher can GE Vernova’s multiple go?
Margins are the catch
On the earnings call, CFO Charles Boynton warned that higher diesel, steel and logistics costs, plus new-product ramp costs, would pressure second-half margins.
Bottom line: Jefferies has this one right, and if margins hold up, I’d expect analysts’ targets to follow the stock back up. Of course, the fiscal third-quarter report, due early next year, will show how hard those costs bite.
So what is Nextpower stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
