Solar energy stocks have had a rollercoaster ride in the past few years. From solar panels to microinverters, there is no part of a solar energy system that can't experience supply and demand shock. Microinverter supplier Enphase Energy Inc. NASDAQ: ENPH could do no wrong as it rose to a $339.92 high in December 2022. However, it seemed like it could do nothing right as it tripped over itself, falling to a low of $73.49 nearly a year later by November 2023.
While these companies create equipment and tools for the sustainable energy industry, they are members of the industrial sector. Solar trackers are mechanical systems that adjust the solar panels to position them to receive direct sunlight throughout the day. The angle that the sun's rays meet the solar panel is called the angle of incidence. This angle determines how well the solar panel can convert solar radiation into electricity. A narrower angle of incidence results in more energy production from a photovoltaic (solar) panel.
Boosting energy production
Solar trackers cost more to install and maintain than conventional fix-tilt systems, but they have the potential to boost energy production by up to 35% for single-axis and 45% for dual-axis trackers. They help to maximize the output and efficiency of solar panels, enabling them to be mounted on uneven surfaces as well. Here are two dominant leaders in the solar tracker industry that could heat your portfolio gains in 2024. Between the two of them, they command a 48% market share.
Nextracker Inc.
Nextracker Inc. NASDAQ: NXT has been the leader in solar tracker systems for seven consecutive years, with an estimated 30% global market share. Its systems use self-adjusting algorithms with advanced monitoring and digital connectivity to optimize the performance of its smart solar trackers. Its self-powered and decentralized architecture enables each row to be commissioned in advance. Their systems provide an all-terrain solution, as the trackers can be placed on uneven land surfaces. They are also a leader in agrivoltaics, which enable the solar tracker systems to be integrated with animal and agriculture operations where farms can also generate solar power.
Sizzling results
On January 31, 2025, Nextracker reported fiscal Q3 2024 EPS of 96 cents, crushing consensus analyst estimates by 47 cents. Revenues rose 38.3% to a record $710 million, beating consensus analyst estimates of $619.38 million. The company grew a record backlog of over $3 billion and achieved a 10 MW milestone in India, the Middle East, and the African regions. The company closed the quarter with $800 million in liquidity and generated adjusted free cash flow of over $300 million YTD. The company has over 500 patents for its products and technologies. Check out the sector heatmap on MarketBeat.
Brighter future
Nextracker raised its fiscal full-year 2024 EPS forecasts to $2.55 to $2.75, up from $1.95 to $2.15 versus $2.17 consensus estimates. Full-year 2024 revenue guidance was raised to $2.435 billion to $2.475 billion, up from $2.3 billion to $2.4 billion versus $2.35 billion.
Nextracker CEO Howard Wenger commented, "We've implemented a regional strategy to enable international expansion further. We have successfully deployed a strategic pivot to localize our U.S. supply chain, which is in full flight. The U.S. remains our largest served market, representing 78% of total Q3 revenue. This is a higher percentage than in previous reported quarters. However, we expect our revenue mix to continue to be approximately two-thirds U.S. and one-third international for the full fiscal year '24."
Nextracker analyst ratings and price targets are at MarketBeat. Nextracker peer and competitor stocks can be found with the MarketBeat stock screener.
Daily ascending triangle and Golden Cross breakout
The daily candlestick chart on NEXT illustrates an ascending triangle breakout pattern. The ascending trendline commenced at the $39.75 swing low, rising to the flat-top horizontal upper trend at $46.47. The daily market structure low (MSL) was triggered at $42.32. The daily 50-period moving average (MA) is rising at $44.01 after triggering the Golden Cross breakout through the 200-period MA at $39.72. The daily relative strength index surged up to the overbought 79-band on the earnings gap and go. Pullback support levels are at $51.64, $46.47, $43.69 and $39.75.
Array Technologies Inc.
The number two solar tracker company is Array Technologies Inc. NASDAQ: ARRY, which has an 18% global market share. The chart trajectories have had a negative correlation with NXT thus far. If Nextracker's blowout earnings are any clue, then investors may keep focused on a potential laggard reaction with Array Technologies stock. Unfortunately, the company's stock and business have been in an opposite trajectory, stemming from an earnings warning and miss from its Q3 2023 release on November 7, 2023. The main culprit has been short-term delays in project timing due to customer pushouts. Investors are wondering if it's a demand issue or a timing issue. Get AI-powered insights on MarketBeat.
Shortfall and lowered guidance
Array reported Q3 2023 EPS of 21 cents on November 8, 2023, beating analyst estimates by 9 cents. Revenues fell 32% YoY to $350.44 million, falling short of the $377.12 million consensus analyst estimates. Total executed contracts and awarded orders on September 30, 2023, was $1.6 billion and $1.4 billion from the Array Legacy Operations segment from STI Norland, which was negatively impacted by $80 million of canceled orders due to Brazilian "Forgiveness Day" granting amnesty from renewable energy projects.
The company slightly lowered forecasts for full-year 2023 EPS of $1.00 to $1.05, down from $1.00 to $1.07 versus $1.04 consensus estimates. Full-year 2023 revenue estimates were cut from $1.525 billion to $1.575 billion, down from $1.65 billion to $1.725 billion, versus $1.7 billion consensus estimates.
CEO Insights
Array Technologies CEO Kevin Hostetler underscored that demand was strong, but near-term secular challenges impacted volume. They are witnessing a steady increase in its domestic pipeline after more than doubling from its second quarter.
Short-term delays were out of their control, "For instance, this quarter, we had several projects that experienced delays associated with financing as developers are focused on renegotiating PPA rate to improve project returns in this higher interest rate environment. We fully expect financing and continued delays related to permitting and other items to be sorted out in the near term. This is yet another complexity that we are working to understand with our customers."
Hostetler commented, "This increase is a key early indicator of the expected momentum in our order book. That said, we have continued to be impacted by short-term delays in project timing driven by customer pushouts, which has reduced our revenue outlook for the full year. Accordingly, we expect our Adjusted EBITDA and Adjusted EPS outlook to remain largely unchanged."
Second-half margin recovery
Hostetler continued, "However, despite these project timing challenges, we continue to be encouraged by our operational execution, in particular our efforts to expand our non-tracker offerings, which will drive better than anticipated margins for the second half of the year."
Array Technologies analyst ratings and price targets are at MarketBeat.
Daily descending triangle
The daily candlestick chart on ARRY indicates a descending triangle pattern as shares fell, making lower lows and rejecting the descending upper trendline. The flat-bottom horizontal lower trendline is at $12.86. The daily MSL trigger is at $13.95. The daily RSI has been attempting to bounce but is stalled around the 40-band as ARRY moves closer to the apex point. Pullback support levels are at $12.86, $11.98, $10.12 and $9.24.
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