Contrasting Canadian Solar (NASDAQ:CSIQ) and Nextpower (NASDAQ:NXT)

Nextpower (NASDAQ:NXT) and Canadian Solar (NASDAQ:CSIQ) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Institutional & Insider Ownership

67.4% of Nextpower shares are held by institutional investors. Comparatively, 52.4% of Canadian Solar shares are held by institutional investors. 0.6% of Nextpower shares are held by insiders. Comparatively, 21.5% of Canadian Solar shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Nextpower and Canadian Solar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nextpower	16.46%	28.18%	15.62%
Canadian Solar	-1.87%	-4.20%	-1.10%

Earnings & Valuation

This table compares Nextpower and Canadian Solar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextpower	$3.56 billion	5.44	$585.88 million	$3.83	34.07
Canadian Solar	$5.60 billion	0.23	-$104.13 million	($2.52)	-7.49

Nextpower has higher earnings, but lower revenue than Canadian Solar. Canadian Solar is trading at a lower price-to-earnings ratio than Nextpower, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Nextpower and Canadian Solar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextpower	0	5	18	1	2.83
Canadian Solar	4	6	3	0	1.92

Nextpower currently has a consensus target price of $136.54, indicating a potential upside of 4.63%. Canadian Solar has a consensus target price of $18.36, indicating a potential downside of 2.73%. Given Nextpower’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Nextpower is more favorable than Canadian Solar.

Volatility & Risk

Nextpower has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500. Comparatively, Canadian Solar has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500.

Summary

Nextpower beats Canadian Solar on 13 of the 15 factors compared between the two stocks.

About Nextpower

Nextpower, formerly known as Nextracker, an energy solutions company, provides solar trackers and software solutions for utility-scale and distributed generation solar projects in the United States and internationally. The company offers tracking solutions, which includes NX Horizon, a solar tracking solution; and NX Horizon-XTR, a terrain-following tracker designed to expand the addressable market for trackers on sites with sloped, uneven, and challenging terrain. It also provides TrueCapture, a self-adjusting tracker control system, which boosts solar power plant production by optimizing the position of individual tracker row in response to site features, such as varying topography and changing weather conditions; and NX Navigator, that assists solar power plant owners and operators in monitoring, controlling, and protecting their solar projects. The company was founded in 2013 and is headquartered in Fremont, California. As of March 31, 2024 Nextracker Inc. (Nextpower) was formerly a subsidiary of Flex Ltd.

About Canadian Solar

Canadian Solar Inc., together with its subsidiaries, provides solar energy and battery energy storage products and solutions in in Asia, the Americas, Europe, and internationally. The company operates through two segments, CSI Solar and Recurrent Energy. The CSI Solar segment designs, develops, and manufactures solar ingots, wafers, cells, modules, and other solar power and battery storage products. It offers standard solar modules and battery storage solutions; solar system kits, such as inverters, racking systems, and other accessories; power electronic products; and engineering, procurement, and construction (EPC) services, as well as operates battery energy storage projects. The Recurrent Energy segment engages in the development, construction, maintenance, and sale of solar power and battery storage projects; and operation of solar power plants; and sale of electricity. This segment provides operation and maintenance (O&M) services, including monitoring, inspections, repair, and replacement of plant equipment; and site management and administrative support services for solar projects, as well as asset management services. It has a fleet of solar and battery energy storage plants in operation with an aggregate capacity of approximately 1,005 MWp and 600 MWh. It serves distributors, system integrators, project developers, and installers/EPC companies, as well as utility companies or grid operators, public utilities, licensed suppliers, corporate offtakers, and commercial, industrial or government end users. It sells its products primarily under its Canadian Solar brand name. Canadian Solar Inc. was incorporated in 2001 and is based in Guelph, Canada.