Following Safran Deal Is NextNav (NN) Still Undervalued Or Is Hope Priced In?
Why the NextNav event matters for investors
NextNav (NN) has drawn fresh attention after announcing an agreement with Safran Electronics & Defense to test interoperability between its terrestrial 5G PNT network and Safran’s timing and navigation receiver in Santa Clara County.
The program focuses on how 5G powered 3D positioning, navigation, and timing could support drones, autonomous systems, critical infrastructure, and public safety by complementing existing GPS and other GNSS technologies.
See our latest analysis for NextNav.
Despite the Safran agreement putting NextNav’s technology in the spotlight, the stock has been volatile, with the share price down 26% over the past 30 days and 32% over 90 days, yet a three year total shareholder return of around 2.7x points to a very different long term picture.
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NextNav’s share price has fallen sharply in recent months, even as interest in its 5G PNT technology grows. Does that reset tip the risk reward balance toward buyers, or is the stock still pricing in a lot of hope?
Most Popular Narrative: 67% Undervalued
The most followed narrative on NextNav sees a fair value of $39.50 per share compared with the last close at $13.11, which implies a large valuation gap that hinges on how its spectrum and 3D PNT platform are monetised over time.
Progress at the FCC toward an NPRM on 5G based 3D PNT in the lower 900 megahertz band, combined with a congressional push to free more spectrum, sets the stage for commercial rights that can unlock new service revenues and crystallize spectrum value on the balance sheet, supporting higher earnings and asset valuations.
Curious what justifies that kind of uplift for NextNav? The narrative leans on shrinking revenue declines, a sharp margin shift and a future earnings multiple that is anything but ordinary.
Result: Fair Value of $39.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, NextNav investors still need to weigh regulatory delay risk at the FCC and the chance that competing PNT providers will limit the company’s share of deployments.
Find out about the key risks to this NextNav narrative.
Next Steps
If the mixed mood around NextNav has you on the fence, now is a good time to review the data yourself and weigh the concerns. Start with the 3 important warning signs.
Looking for more investment ideas beyond NextNav?
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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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