NextNav (NASDAQ:NN) Shares Gap Up After Strong Earnings

Key Points

• NextNav beat quarterly estimates: It reported a loss of $0.04 per share versus the expected $0.12 loss, while revenue of $1.58 million exceeded the $0.99 million consensus.
• Shares opened at $9.15, up from the prior close of $8.40, and were last trading at $8.575. The company also highlighted single-digit-meter positioning performance in Santa Clara and ended the quarter with about $290 million in liquidity.
• Profitability remains a major risk: NextNav reported a negative net margin of 3,232.19% and generated relatively little revenue, despite its earnings beat and technical progress.

NextNav Inc. (NASDAQ:NN - Get Free Report) shares gapped up before the market opened on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $8.40, but opened at $9.15. NextNav shares last traded at $8.5750, with a volume of 341,550 shares trading hands.

The company reported ($0.04) EPS for the quarter, beating the consensus estimate of ($0.12) by $0.08. NextNav had a negative net margin of 3,232.19% and a negative return on equity of 211.25%. The business had revenue of $1.58 million for the quarter, compared to the consensus estimate of $0.99 million.

NextNav News Roundup

These are some of the NN news items that stood out recently:

• Positive Sentiment: NextNav reported a Q3 loss of $0.04 per share, narrower than the $0.12 loss analysts expected. Revenue was $1.58 million, above the $0.99 million consensus estimate. NextNav Q3 results and operational highlights
• Positive Sentiment: The company highlighted single-digit-meter positioning performance in Santa Clara, a technical milestone for its positioning technology. It ended Q3 with about $290 million in liquidity, providing resources to fund operations and development. NextNav positioning and liquidity update
• Negative Sentiment: Despite beating estimates, NextNav remains unprofitable and generated only $1.58 million in quarterly revenue. Its reported negative net margin underscores the risk that technical progress and available liquidity have yet to translate into sustainable commercial revenue. NextNav earnings results

Wall Street Analysts Forecast Growth

A number of research analysts have issued reports on the stock. Zacks Research lowered shares of NextNav from a "strong-buy" rating to a "hold" rating in a research report on Thursday, August 20th. Weiss Ratings reiterated a "sell (d-)" rating on shares of NextNav in a research note on Thursday, October 15th. Wells Fargo & Company reissued a "buy" rating on shares of NextNav in a research report on Monday, September 21st. Wall Street Zen downgraded NextNav from a "hold" rating to a "sell" rating in a research report on Sunday, September 27th. Finally, Odeon Capital Group assumed coverage on NextNav in a research note on Monday, July 20th. They set a "buy" rating and a $22.00 price objective on the stock. One research analyst has rated the stock with a Strong Buy rating, four have given a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of $32.33.

Insider Buying and Selling

In related news, General Counsel James Black sold 1,878 shares of the company's stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $15.34, for a total transaction of $28,808.52. Following the completion of the transaction, the general counsel directly owned 89,810 shares in the company, valued at $1,377,685.40. This represents a 2.05% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Mariam Sorond sold 69,853 shares of the stock in a transaction that occurred on Thursday, September 3rd. The shares were sold at an average price of $15.30, for a total transaction of $1,068,750.90. Following the completion of the transaction, the chief executive officer directly owned 1,171,792 shares of the company's stock, valued at approximately $17,928,417.60. The trade was a 5.63% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 87,667 shares of company stock worth $1,331,153 in the last three months. 7.80% of the stock is owned by corporate insiders.

Institutional Trading of NextNav

Hedge funds have recently made changes to their positions in the company. Sona Asset Management US LLC increased its stake in shares of NextNav by 37.9% in the first quarter. Sona Asset Management US LLC now owns 521,477 shares of the company's stock valued at $8,354,000 after buying an additional 143,349 shares during the period. State Street Corp raised its holdings in NextNav by 4.8% in the 2nd quarter. State Street Corp now owns 2,343,255 shares of the company's stock valued at $41,780,000 after buying an additional 108,338 shares during the last quarter. BlueCrest Capital Management Ltd bought a new position in NextNav in the 2nd quarter valued at approximately $4,012,000. General American Investors Co. Inc. acquired a new stake in NextNav during the 3rd quarter worth approximately $10,063,000. Finally, Squarepoint Ops LLC boosted its position in NextNav by 592.0% during the 2nd quarter. Squarepoint Ops LLC now owns 113,073 shares of the company's stock worth $2,016,000 after buying an additional 96,734 shares during the period. 79.16% of the stock is owned by institutional investors and hedge funds.

NextNav Trading Up 2.1%

The firm has a market capitalization of $1.45 billion, a price-to-earnings ratio of -8.80 and a beta of 1.20. The firm's 50-day moving average is $12.56 and its 200 day moving average is $16.18.

NextNav Company Profile

NextNav, Inc. develops positioning, navigation and timing technologies designed to complement and help provide alternatives to satellite-based GPS. Its services support location-aware applications in environments where GPS signals may be limited, including indoors and in urban areas. The company's offerings include Pinnacle, a service that provides vertical location information, such as a device's floor or height within a building, and TerraPoiNT, a terrestrial network designed to deliver positioning and timing signals.

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