Value
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Fwd P/E | 1.0 |
| PEG | 6.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 108.3x
- ▸PEG: 1.03
NEXT · Why this verdict
Why NextDecade (NEXT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NextDecade's entire business is concentrated in the Rio Grande LNG Facility with Bechtel as the sole construction contractor, meaning any delay, cost overrun, or contractor issue would directly impair the company's only revenue-generating asset. Bear case | Construction milestones progress on schedule with no publicly announced material delays or cost overruns above 15% over the next 12 months. | →Stable |
| CounterSingle-asset concentration in a large-scale LNG project is typical for development-stage energy companies, and Bechtel's track record provides some assurance of execution capability. | ||
NextDecade is cash-burning with a Piotroski F-Score of only 2 out of 9, indicating multiple balance-sheet and earnings-quality warning signals, and quality scores well below the minimum threshold for investment-grade positioning. Quality breakdown | The company secures additional financing or off-take agreements that extend its cash runway beyond 18 months, reducing dilution risk. | →Stable |
| CounterDevelopment-stage LNG companies are expected to burn cash during construction; the Piotroski score may be temporarily depressed by the pre-revenue nature of the business. | ||
Short interest stands at 14% of float and the put/call ratio is 3.43, reflecting strong institutional skepticism about the company's ability to complete its LNG project on budget and on time. Key risks | Short interest declines below 10% and put/call ratio falls below 2.0 as project execution milestones are met over the next 12 months. | →Stable |
| CounterHigh short interest in a development-stage company can create short-squeeze dynamics if positive news triggers covering pressure, providing upside optionality for early buyers. | ||
Analysts maintain a 22% upside target to consensus price, reflecting optimism about LNG demand fundamentals and the long-term value of a completed Rio Grande LNG terminal. Sentiment breakdown | At least one analyst raises their price target above $10 within 12 months following a positive project milestone announcement. | →Stable |
| CounterA forward P/E of 110x for a company with no current revenues implies that analyst targets are based on speculative terminal value assumptions rather than near-term earnings fundamentals. | ||
NextDecade's entire business is concentrated in the Rio Grande LNG Facility with Bechtel as the sole construction contractor, meaning any delay, cost overrun, or contractor issue would directly impair the company's only revenue-generating asset.
→StableBear case
- Expectation
- Construction milestones progress on schedule with no publicly announced material delays or cost overruns above 15% over the next 12 months.
CounterSingle-asset concentration in a large-scale LNG project is typical for development-stage energy companies, and Bechtel's track record provides some assurance of execution capability.
NextDecade is cash-burning with a Piotroski F-Score of only 2 out of 9, indicating multiple balance-sheet and earnings-quality warning signals, and quality scores well below the minimum threshold for investment-grade positioning.
→StableQuality breakdown
- Expectation
- The company secures additional financing or off-take agreements that extend its cash runway beyond 18 months, reducing dilution risk.
CounterDevelopment-stage LNG companies are expected to burn cash during construction; the Piotroski score may be temporarily depressed by the pre-revenue nature of the business.
Short interest stands at 14% of float and the put/call ratio is 3.43, reflecting strong institutional skepticism about the company's ability to complete its LNG project on budget and on time.
→StableKey risks
- Expectation
- Short interest declines below 10% and put/call ratio falls below 2.0 as project execution milestones are met over the next 12 months.
CounterHigh short interest in a development-stage company can create short-squeeze dynamics if positive news triggers covering pressure, providing upside optionality for early buyers.
Analysts maintain a 22% upside target to consensus price, reflecting optimism about LNG demand fundamentals and the long-term value of a completed Rio Grande LNG terminal.
→StableSentiment breakdown
- Expectation
- At least one analyst raises their price target above $10 within 12 months following a positive project milestone announcement.
CounterA forward P/E of 110x for a company with no current revenues implies that analyst targets are based on speculative terminal value assumptions rather than near-term earnings fundamentals.
TrendMatrix Research · core thesis
Engine thesis — one sentence
NextDecade Corporation is a pre-revenue LNG development company whose entire value rests on the Rio Grande LNG facility reaching completion, but cash-burning operations, a weak Piotroski F-Score of 2, and an elevated put/call ratio of 3.43 signal that markets are pricing significant execution risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
0.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 1.6 |
| FCF quality | 0.0 |
| Moat | 3.2 |
| Piotroski F | 2.2 |
- ▸Cash-burning (FCF negative)
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
- ▸Quality concerns
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| EPS growth | 10.0 |
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.7 |
| OBV | 10.0 |
| MA position | 3.0 |
| Volume | 0.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.1 |
| erm sentiment | 6.0 |
- ▸Analyst upside: 24%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 0.3 |
| growth rank | 5.0 |
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.2 |
| support resistance | 6.8 |
| 52w position | 2.5 |
Risk (lower is worse)
1.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.8 |
| days to cover | 2.1 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.7 |
| beta | 5.0 |
| debt equity | 1.0 |
- ▸Elevated put/call: 11.44
- ▸High IV: 76%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 6.8 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.6<1.5@spot
Warning (2)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.62
Upside
+7.9%
Downside
12.7%
Sizing output
AVOID
SetupRange Bound — RSI 41 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.51>1.3, MCap $2.0B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:0.6<1.5@spot.
The strongest dimensions are Growth at 10.0, Sentiment at 6.3, and Technical at 5.2; the weakest are Quality at 0.8, Risk (lower is worse) at 1.7, and Peer rank at 2.6. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.62 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Single Asset Construction Risk
Trip ifConstruction cost estimate for the Rio Grande facility increases more than 20% above original budget.
- P2Cash Burn Quality Floor Breach
Trip ifCash balance falls below 6 months of projected operating expenses at the burn rate reported in the most recent quarter.
- P3High Short Interest Bearish Options
Trip ifShort interest rises above 20% of float or put/call ratio exceeds 5.0.
- P4Analyst Upside Sentiment
Trip ifPrice drops below $7.35 stop-loss level or analyst consensus target declines below $8.