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A pricing method that looks at what a company is worth today if it were liquidated, not future cash flow — and why that matters especially for certain companies.
Net Asset Value (NAV) calculates a company's worth from a completely different angle than DCF: not how much cash flow it will generate in the future, but how much its assets are worth today, minus liabilities — as if the company were sold or liquidated tomorrow.
DCF assumes the business will keep operating and generating cash flow (a 'going concern') — an assumption that isn't always true, and that depends heavily on future growth assumptions. NAV provides an alternative 'floor': even if operating forecasts turn out wrong, there's tangible value in the assets themselves. The two models check different questions and complement each other.
NAV is especially meaningful for companies with large tangible assets relative to earnings (real estate, holding companies, banking) — where the value of the assets themselves is a central part of the picture. For tech companies with few tangible assets but high growth potential, DCF is usually far more relevant.
StockIQ weighs NAV together with DCF and P/E multiple comparisons within the Fair Value category (15% of the score) — three deliberately different methods, so no single assumption (future cash flow, or asset value alone) that could be wrong determines the whole picture.
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The information in this guide is intended for general educational purposes only and does not constitute investment advice. Full details on the disclaimer page.