NextDecade Corporation

Overview

This is an investment analysis report on NextDecade Corporation (NASDAQ: NEXT), a developer of the Rio Grande LNG export facility. The report applies William J. O'Neil's CAN SLIM methodology to evaluate the stock's potential, synthesizing structured financial data, company announcements, analyst ratings, and market sentiment as of late November/early December 2025.

Financial and Business Overview

NextDecade is a pre-revenue, development-stage company focused on constructing the Rio Grande LNG facility in Brownsville, Texas. Financially, it reports consistent losses, with an EPS TTM of -$0.74 and an EPS forward estimate of -$1.01 (as of Dec 2, 2025). It has a market cap of ~$1.58B, a high price-to-book of 10.22, and significant leverage (debt-to-equity ~3.34). The business model centers on securing long-term LNG Sale and Purchase Agreements (SPAs) and project-level financing to fund construction. Key recent progress includes Final Investment Decisions (FIDs) and full financing for Train 4 (Sept 2025) and Train 5 (Oct 2025), securing ~$13.4B in total project funding without material dilution to common shares.

Market Position & Competitive Advantages

NextDecade holds a strategic position in the growing global LNG market, with Shell predicting 60% demand growth by 2040. Its competitive advantages include a permitted, advantaged site in South Texas with access to prolific shale gas basins, long-term SPAs with creditworthy counterparties (e.g., TotalEnergies, JERA, Aramco, ConocoPhillips, EQT), and lump-sum EPC contracts with Bechtel, which de-risk construction. The potential to develop up to 48 MTPA of capacity offers long-term optionality. However, significant risks persist: it is pre-revenue, faces intense competition from other U.S. and global LNG projects, carries high execution and cost-overrun risks for multi-billion dollar trains, and remains vulnerable to regulatory changes and fluctuations in global natural gas prices.

Stock Performance

The stock has been under significant pressure, trading at $5.97 (as of Dec 2, 2025), down 14.19% over the past year. It is trading below its key moving averages (50-day: $6.25, -4.5%; 200-day: $8.05, -25.86%) and is near the lower end of its 52-week range ($5.16 - $12.12). Average trading volume has declined recently (10-day avg: ~2.97M vs 3-month avg: ~4.26M), indicating waning interest or a consolidation phase. Despite positive project milestones, the stock has failed to sustain momentum, reflecting investor concerns over ongoing losses and the long timeline to cash flow generation (first LNG from initial trains expected 2027).

CAN SLIM Analysis

Conclusion

NextDecade has made undeniable progress in de-risking its Rio Grande LNG project, securing financing and offtake for Trains 4 and 5. This provides a clearer path to future cash flows. However, applying the strict CAN SLIM framework, the stock fails on the two most important criteria: Current Earnings and Annual Earnings Increases. It remains a pre-revenue, loss-making company with its stock in a pronounced downtrend. While it possesses compelling long-term potential and increasing institutional sponsorship, it does not currently meet the criteria for a 'BUY' in a growth-oriented investment system. It is a high-risk, high-potential-reward story that is better suited for watchlisting until it demonstrates fundamental earnings improvement or a decisive change in market character.