NextNav (NASDAQ:NN investor one-year losses grow to 66% as the stock sheds US$57m this past week

Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of NextNav Inc. (NASDAQ:NN) have suffered share price declines over the last year. To wit the share price is down 66% in that time. Because NextNav hasn't been listed for many years, the market is still learning about how the business performs. More recently, the share price has dropped a further 31% in a month.

After losing 20% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for NextNav

NextNav wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year NextNav saw its revenue grow by 270%. That's well above most other pre-profit companies. In contrast the share price is down 66% over twelve months. Yes, the market can be a fickle mistress. Typically a growth stock like this will be volatile, with some shareholders concerned about the red ink on the bottom line (that is, the losses). Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for NextNav in this interactive graph of future profit estimates.

A Different Perspective

We doubt NextNav shareholders are happy with the loss of 66% over twelve months. That falls short of the market, which lost 7.3%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 26%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 5 warning signs for NextNav (2 can't be ignored) that you should be aware of.

NextNav is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.