NextNav (NN) stock has seen its share price fluctuate over the past month, with a pullback of nearly 19%. Investors following the company may be watching for signs of stabilization or new catalysts to drive direction.

Despite a softer patch this month, NextNav’s share price remains well above where it was a year ago. A 1-year total shareholder return of 0.87% suggests steady, if modest, progress. Recent momentum has cooled, which could signal the market is waiting for clearer signs of growth or risk reduction before making its next move.

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With shares still trading almost 40% below analyst estimates, investors face a classic dilemma. Could NextNav be undervalued and poised for a rebound, or is the current price a fair reflection of future growth potential?

Price-to-Book of -40.7x: Is it justified?

NextNav's current price-to-book ratio stands at -40.7x, a figure that is deeply negative and highly unusual. This result highlights key challenges in analyzing the company’s valuation using traditional methods.

The price-to-book ratio compares a company's market price to its book value. For most companies, positive equity underpins this valuation, but negative equity complicates the picture and often signals substantial accumulated losses or balance sheet stress.

NextNav’s negative ratio is primarily due to its negative shareholders’ equity. Instead of demonstrating the stock’s strength, such a number typically points to financial difficulties. It cannot be fairly compared with either peers or industry averages in a meaningful way.

Given these limitations, using standard multiples like price-to-book for NextNav does not yield a reliable assessment of value. Investors looking for a more actionable perspective may need to consider alternative approaches, such as discounted cash flow modeling.

Result: DCF Fair value of $20.00 (UNDERVALUED)

However, ongoing revenue declines and persistent net losses remain key risks that could affect NextNav’s recovery in the near term.

Build Your Own NextNav Narrative

If you prefer to dig into the numbers yourself or want to develop your own perspective, creating a personal investment narrative takes just a few minutes. Do it your way

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.