NEXT

NextDecade ($NEXT) CEO Buys $2M in Stock Amid Sharp Decline - Strong Confidence Signal

09/15/2025 12:31

NextDecade Corp ($NEXT) CEO Matthew Schatzman purchased 281,500 shares of company stock on September 12 at an average price of $7.14 per share, investing a total of $2.01 million. This purchase occurred on the same day the stock closed at $6.84, indicating the CEO was willing to buy at approximately 4% above the market price. NextDecade is a small-cap energy company developing the $18 billion Rio Grande LNG export terminal in Brownsville, Texas. The company is constructing five liquefaction trains with a combined annual capacity of 17.61 million tons of LNG, with trains 1-3 currently under construction and train 4 having received final investment decision approval. The CEO's purchase is particularly significant given the market context. NextDecade's stock plummeted approximately 43% from its July mid-month high of $12 to mid-September lows, coinciding with Morgan Stanley's September 12 downgrade from Overweight to Equal-weight and a 33% price target reduction from $15 to $10. Against this backdrop, Schatzman's $2 million investment demonstrates strong confidence in the company's internal prospects. The timing of the purchase is especially noteworthy. The CEO bought shares at an average of $7.14 on the very day the stock fell to $6.84, suggesting he viewed current prices as significantly undervalued. This willingness to purchase above market price indicates conviction about future appreciation potential beyond simple value buying. NextDecade's business fundamentals remain solid despite recent stock pressure. The company has secured multiple long-term LNG supply agreements this year, including 20-year contracts with Saudi Aramco (1.2 million tons annually), Japan's JERA (2 million tons), and EQT Corp (1.5 million tons). These long-term contracts provide essential cash flow stability for project financing. The structural growth in LNG markets supports NextDecade's position. The U.S. is currently the world's largest LNG exporter, with export capacity expected to nearly triple by 2030. NextDecade is positioned as a key beneficiary of this expansion, with CEO Schatzman recently forecasting 2% annual natural gas demand growth over the next 15 years. However, regulatory and execution risks remain. In August 2024, a federal court vacated FERC's authorization for the Rio Grande LNG facility, causing a 40%+ stock decline. While the court revised its decision in March 2025 and FERC staff recommended final environmental approval in July, regulatory uncertainty persists. Rising construction costs present another challenge. Morgan Stanley's downgrade partially reflected concerns about high financing costs and lower-than-expected cash flow projections. Industry reports indicate LNG project construction costs have increased up to 20% since 2021 due to skilled labor shortages and wage inflation. Despite these challenges, the CEO's $2 million purchase represents a highly positive signal. Corporate insiders possess superior information about company prospects, and CEO purchases of this magnitude are relatively rare. The willingness to buy above market price underscores confidence in current undervaluation. Investors should consider multiple scenarios. In an optimistic case, completion of final investment decisions for trains 4-5 combined with additional long-term contract wins could drive the stock toward the $10-15 target range. A base case scenario involves successful execution of existing contracts and smooth construction of trains 1-3, potentially stabilizing the stock in the $8-10 range. However, regulatory delays or further construction cost inflation could pressure shares below current levels. In conclusion, NextDecade is well-positioned to benefit from structural LNG market growth, and the CEO's substantial purchase suggests current prices may significantly undervalue the company's prospects. However, investors should expect continued volatility given project execution risks and financing challenges.