NextNav (NN): Gauging Valuation Following Breakthrough 5G Integration Progress

NextNav (NN) recently demonstrated successful integration of its positioning, navigation, and timing technology with standard 5G base stations, marking a concrete step toward commercial deployment. This milestone could influence investor sentiment after a month of share price swings.

See our latest analysis for NextNav.

Despite a sharp 12.5% drop in the 1-month share price return, NextNav’s growth narrative is hard to ignore when you zoom out. Its 1-year total shareholder return stands at an impressive 88%, and over three years shareholders have seen more than a fourfold gain. Recent price swings reflect investors digesting both breakthrough tech milestones and the ongoing risks of negative earnings and shrinking revenue. However, longer-term momentum is still on NextNav’s side.

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With shares still trading around 38% below analyst price targets after recent declines, the question for investors is clear: Is NextNav's future growth underappreciated at current levels, or is the market already looking ahead?

Price-to-Book Ratio of -41.3x: Is it justified?

NextNav’s price-to-book ratio stands out in the sector for being not just low but negative, at -41.3x compared to a peer average of 4.6x. This situation makes the usual analysis of valuation multiples less meaningful and shifts attention to alternative valuation approaches.

The price-to-book ratio is a common method for evaluating technology stocks, especially those with substantial tangible assets or consistent profitability. In NextNav’s case, negative equity leads to a negative ratio, signaling the company’s liabilities are greater than its assets. This serves as a red flag for traditional investors, as negative equity is rare and indicates a highly leveraged or loss-making situation.

Compared to industry standards, NextNav’s negative price-to-book ratio is well below both the US Software industry average of 4.2x and its direct peer group at 4.6x. The steep negative figure reflects ongoing unprofitability and suggests investors are currently not valuing the company’s net assets at all.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book Ratio of -41.3x (ABOUT RIGHT)

However, persistent revenue decline and significant net losses remain risks that could challenge bullish expectations for NextNav’s future growth trajectory.

Find out about the key risks to this NextNav narrative.

Build Your Own NextNav Narrative

If you’re inspired to look beyond the headline story or want to dig deeper into the numbers yourself, you can build your own perspective and Do it your way in just minutes.

A great starting point for your NextNav research is our analysis highlighting 2 important warning signs that could impact your investment decision.

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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.

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