Nextpower Inc. (NXT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Nextpower Inc. (NXT)

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Intrinsic Value (DCF)

Current$98.65
Intrinsic$128.58
+30%
$89.17$128.58$203.39
Market implies 13% growth for 5 years
DCF analysis suggests NXT could have 30% upside at 20% growth — verify assumptions match your view.
At $99, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (20%).
Range: Bear $89 → Bull $203. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →16%18%20%22%
8%$156$168$182$196
10%$111$119$129$138
12%$86$92$99$107
14%$70$75$81$86

Bull Case

  • Bull case ($203) offers 106% upside at 24% growth, 9% discount
  • 23% margin of safety vs. base case estimate
  • Market-implied growth (13%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($89) implies 10% downside at 16% growth, 12% discount
  • Using 20% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$748.52M
Year 2$900.96M
Year 3$1.08B
Year 4$1.31B
Year 5$1.57B
Terminal$23.12B

📐 Model Inputs

Growth Rate20.4%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$621.87MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is NXT stock undervalued or overvalued?
🟢 UNDERVALUED

NXT trades at $98.65 vs. our DCF-derived intrinsic value of $126.86, implying +39% upside. At a 10.0% WACC and 20.4% projected FCF growth, the market appears to be underpricing the present value of NXT's future cash flows. The bear case ($84.89) still suggests upside, providing margin of safety.

What is NXT's intrinsic value?

Using a 5-year DCF model: Base FCF of $622M, projected at 20.4% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-732M net debt and dividing by 0.15B shares: Bear $84.89 | Base $126.86 | Bull $188.66. Current price $98.65 implies +39% to base case.

How is NXT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.4% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($18.21B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.