NextDecade (NEXT) just swung from loss to profit in its latest quarterly report, posting net income of US$155.38 million and basic earnings of US$0.58 per share from continuing operations.
The earnings swing has arrived alongside a pick up in momentum for NextDecade, with a 7 day share price return of 10.15% and a year to date share price gain of 21%. The 1 year total shareholder return of 12.83% comes off a much stronger 3 year total shareholder return of 49.66%, suggesting enthusiasm has cooled compared with earlier years even as the latest quarter gives bulls fresh talking points.
Compare NextDecade's earnings swing with other energy names showing fresh momentum by scanning our hand picked 26 high quality undervalued stocks.
After that earnings flip and a strong year to date run, the real tension now is simple: Does NextDecade still offer enough upside potential to justify the risks buyers are taking at US$6.51?
Most Popular Narrative: 41% Undervalued
NextDecade's most followed valuation story pegs fair value at $11.00, well above the last close at $6.51. This puts a spotlight on how much future Rio Grande LNG earnings need to carry the load.
Large scale LNG capacity under construction at Rio Grande, with 30 million tonnes per annum across Trains 1 through 5 and long-term SPAs that include approximately US$3b of annual fixed fee cash flow before escalation, sets up a substantial contracted revenue base that can support distributable cash flow visibility and earnings stability over nearly two decades.
See why 4 investors see NextDecade as 41% undervalued.
Result: Fair Value of $11.00 (UNDERVALUED)
Still, the bullish NextDecade story runs into real hurdles if uncontracted early LNG volumes clear at thinner margins, or if heavily financed expansion projects suffer construction delays and cost pressure.
Find out about the key risks to this NextDecade narrative.
Next Steps
Mixed signals rarely last. If the latest NextDecade move has you on the fence, dig into the data now and weigh both the upside case and the potential downside, then finish by checking the 1 key reward and 3 important warning signs.
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