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Nextdoor Holdings (NXDR)
NYSE:NXDR
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Nextdoor Holdings
(NYSE:NXDR)
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Rating:51Neutral
Price Target:
$1.50
▼(-14.29% Downside)
Action:ReiteratedDate:02/19/26
The score is driven primarily by improving but still mixed financial performance (strong gross margins, better cash flow, low leverage, but continued GAAP losses). Technicals are a notable drag with the stock below key moving averages and negative MACD. The earnings call adds support via improved monetization and adjusted profitability, but near-term guidance and WAU volatility temper the outlook; valuation is constrained by a negative P/E and no dividend.
Positive Factors
High gross margins
Sustained 81–85% gross margins indicate powerful unit economics in Nextdoor’s ad product: high incremental profitability per ad sale supports scalable revenue growth, funds product and AI investments, and provides a durable cushion while the company refines operating leverage toward GAAP profitability.
Strong liquidity and low leverage
A $405M cash balance and zero debt give Nextdoor substantial financial flexibility to fund multi-quarter product builds, programmatic investments, and marketing without relying on external financing. Positive operating cash flow in 2025 reduces refinancing risk and supports disciplined capital allocation over the medium term.
Self-serve momentum and ARPU gains
Rapid self-serve growth and rising ARPU show the platform is capturing efficiency and scale in local advertising. Higher self-serve mix lowers sales costs, improves margin sustainability, and creates a repeatable, scalable revenue engine less dependent on large direct-sales cycles over the next several quarters.
Negative Factors
GAAP losses persist
Despite margin improvement, continued GAAP losses and a roughly -21% net margin in 2025 mean Nextdoor has not yet converted strong unit economics into sustainable corporate profitability. Persistent GAAP losses can erode equity returns and constrain capital deployment if adjusted results fail to translate to GAAP over time.
User growth volatility (WAU)
Management’s deliberate pullback on notifications and acquisition to prioritize engagement quality creates WAU fluctuation. Variable active users can cap addressable impressions and ad monetization upside, making revenue growth more sensitive to engagement metrics rather than broad user expansion over multiple quarters.
Programmatic and large-advertiser adoption incomplete
An immature programmatic stack limits Nextdoor’s ability to win larger brand and agency spend. Building programmatic capabilities is multi-quarter work; until matured, the company may struggle to scale higher-margin, programmatic inventory and diversify advertiser mix, slowing durable revenue expansion from big buyers.
Nextdoor Holdings (NXDR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$678.68M
Dividend YieldN/A
Average Volume (3M)3.05M
Price to Earnings (P/E)―
Beta (1Y)1.39
Revenue Growth6.65%
EPS Growth50.32%
CountryUS
Employees546
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.01
Shares Outstanding260,137,120
10 Day Avg. Volume3,059,062
30 Day Avg. Volume3,054,537
Financial Highlights & Ratios
PEG Ratio0.34
Price to Book (P/B)1.88
Price to Sales (P/S)3.15
P/FCF Ratio137.72
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue2.63
Enterprise Value/Gross Profit3.13
Enterprise Value/Ebitda-9.43
Forecast
1Y Price Target
$2.15Price Target Upside22.86% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)-0.14
Revenue Forecast (FY)$274.68M
Nextdoor Holdings Business Overview & Revenue Model
Company DescriptionNextdoor Holdings, Inc. operates as a holding company, which engages in the provision of a social network site connecting with neighborhood and businesses. The company was founded by Nirav Tolia in 2008 and is headquartered in San Francisco, CA.
How the Company Makes MoneyNextdoor generates revenue primarily through advertising and partnerships. The company's main revenue streams include local and national advertising, where businesses pay to promote their products and services to targeted neighborhood audiences. Additionally, Nextdoor earns money from sponsored content, which allows brands to engage with community members in a more organic manner. The company has also established partnerships with various organizations and local governments, providing them access to the platform for outreach and community engagement initiatives. These partnerships not only enhance Nextdoor’s service offerings but also contribute to its overall revenue by attracting more advertisers and increasing user engagement.
Nextdoor Holdings Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call emphasized clear operational and monetization progress: record quarterly revenue, strong self-serve growth, rising ARPU, positive adjusted EBITDA, improved GAAP margins, and a strong cash position. Management stressed a disciplined, long-term strategy prioritizing engagement quality over raw user growth, and outlined multi-quarter product and AI investments that introduce near-term fluctuations (WAU declines, Q1 negative adjusted EBITDA). While GAAP profitability has not yet been achieved and programmatic/notification work remains, the highlights — particularly profitability on an adjusted basis, strong cash, and material self-serve momentum — materially outweigh the short-term headwinds described.Q4-2025 Updates
Positive Updates
Record Quarterly Revenue
Q4 revenue of $69,000,000, up 7% year over year — described as the highest quarterly revenue in company history driven by self-serve demand and improved yields.
Strong Self-Serve Momentum
Self-serve revenue grew 32% year over year and comprised roughly 60% of total revenue, with AI-driven tools reducing friction in campaign creation and improving advertiser outcomes.
Improved Unit Economics and ARPU
ARPU increased 13% year over year in Q4; revenue per employee rose 26% year over year, signaling operational leverage and productivity gains.
Adjusted EBITDA Turnaround
Q4 adjusted EBITDA was $8,000,000 (11% margin), a six-point year-over-year improvement, and the company delivered positive adjusted EBITDA for full-year 2025 — achieved twelve months ahead of prior schedule.
GAAP Loss Narrowing
Q4 GAAP net loss of $4,000,000 (negative 6% margin) represented a 13-point year-over-year improvement in GAAP margin, indicating meaningful progress toward GAAP profitability.
Healthy Balance Sheet and Liquidity
Ended quarter with $405,000,000 in cash, cash equivalents, and marketable securities and zero debt; reported positive operating cash flow for full-year 2025.
Large Verified Neighborhood Graph
Core proprietary asset: verified address-based neighborhood graph covering 350,000 neighborhoods and more than 105,000,000 verified neighbors (roughly 1 in 3 U.S. households), highlighted as a durable competitive advantage.
Advertiser Retention and Performance Gains
Management reported improved advertiser retention, stronger click-through rates, increasing advertiser counts and average spend, driven by ad stack investments and AI optimization (gains attributed to better performance rather than higher ad load).
Negative Updates
Platform WAU Decline and Fluctuation
Platform WAU was 21,000,000 in Q4, a 3% sequential decline; management expects WAU to continue to fluctuate in the near term as they prioritize engagement quality over volume.
Near-Term Profitability Headwinds in Q1 Guidance
Q1 2026 guidance calls for revenue of $57M–$59M (midpoint ~7% YoY growth) but adjusted EBITDA of negative $6M to negative $4M (approx. -9% margin at midpoint), reflecting expected seasonality and near-term investment and product work.
GAAP Profitability Not Yet Achieved
Despite adjusted EBITDA progress, the company still reported a GAAP net loss of $4,000,000 in Q4 — GAAP profitability remains an outstanding objective.
Ongoing Product Work and Notification Challenges
Management acknowledged significant ongoing product initiatives (notifications, recommendations, Faves/recommendation rollouts) that are multi-quarter in nature; they intentionally pulled back notifications and user acquisition to protect long-term engagement, which may limit near-term user growth.
Programmatic Stack and Large Advertiser Adoption Incomplete
Programmatic ad stack improvements are underway but not fully mature; management views programmatic as necessary to win larger advertisers and noted historical volatility in that category — additional investment required.
Conservative Monetization Tradeoffs
Company is intentionally not increasing ad load and is limiting new user acquisition to prioritize relevance and retention, a deliberate trade-off that could temper short-term topline acceleration.
Company Guidance
Nextdoor guided Q1 2026 revenue of $57–$59M (midpoint ≈ +7% YoY) and adjusted EBITDA of negative $6–$4M (midpoint ≈ -9% margin), noting Q1 is seasonally the softest quarter, that platform WAU will likely continue to fluctuate near term as they prioritize engagement quality over volume (Q4 WAU = 21M, -3% sequential), and that they do not plan to increase ad load or step up new user acquisition in Q1; for full‑year 2026 they expect continued revenue growth with adjusted EBITDA margins in the mid‑single‑digit range. For context they cited Q4 highlights of $69M revenue (+7% YoY), $8M adjusted EBITDA (11% margin), full‑year 2025 positive adjusted EBITDA, ARPU +13% YoY, self‑serve revenue +32% YoY (~60% of total), revenue per employee +26% YoY, and a balance sheet with $405M cash, zero debt, and a Q4 repurchase of 2.5M shares at $1.77 average.Nextdoor Holdings Financial Statement Overview
Summary
Mixed fundamentals: strong 2025 revenue re-acceleration and very high gross margins, plus low leverage and a return to positive operating/free cash flow. Offsetting these are still-negative GAAP net income and negative ROE, so durable profitability remains unproven.Income Statement
Revenue growth re-accelerated in 2025 (up ~168% vs. 2024’s ~13%), and gross margins remained very strong (~81–85% over the period). However, profitability is still a clear weak point: net income remains negative across all years, and 2025 net margin is still about -21% (despite improving meaningfully from roughly -40% in 2024 and ~-68% in 2023). Overall, the business shows strong unit-level gross economics and improving loss profile, but it has not yet converted that into sustainable earnings.38
Negative
Balance Sheet
The balance sheet looks conservatively levered, with low debt relative to equity (debt-to-equity ~0.07 in 2025, improving from ~0.12 in 2023). Equity is solidly positive in recent years, supporting financial flexibility, though it was negative in 2020. The main concern is ongoing losses, reflected in negative returns on equity (about -13% in 2025), which can pressure equity over time if profitability doesn’t improve.63
Positive
Cash Flow
Cash generation improved sharply: operating cash flow turned positive in 2025 (~$6.5M) after being negative from 2020–2024, and free cash flow was also positive (~$5.9M). That said, free cash flow declined versus the prior year (growth around -28%), and the operating cash flow as a share of revenue remains modest (~20% in 2025). Overall, cash flow momentum is better, but consistency and durability are not yet proven.52
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 257.65M | 247.28M | 218.31M | 212.76M | 192.20M |
| Gross Profit | 216.66M | 205.43M | 176.70M | 173.78M | 163.38M |
| EBITDA | -70.01M | -93.46M | -166.51M | -138.55M | -90.63M |
| Net Income | -54.20M | -98.06M | -147.76M | -137.92M | -95.33M |
Balance Sheet | |||||
| Total Assets | 486.80M | 513.95M | 654.56M | 699.56M | 840.09M |
| Cash, Cash Equivalents and Short-Term Investments | 404.77M | 426.98M | 531.10M | 583.30M | 715.81M |
| Total Debt | 55.60M | 40.75M | 66.59M | 61.60M | 68.73M |
| Total Liabilities | 55.52M | 60.47M | 96.01M | 88.49M | 95.10M |
| Stockholders Equity | 431.28M | 453.49M | 558.56M | 611.07M | 744.99M |
Cash Flow | |||||
| Free Cash Flow | 5.89M | -20.61M | -59.54M | -63.66M | -60.11M |
| Operating Cash Flow | 6.47M | -20.20M | -59.27M | -60.50M | -51.27M |
| Investing Cash Flow | 42.57M | 86.43M | 66.49M | -342.45M | -149.52M |
| Financing Cash Flow | -33.99M | -81.03M | 8.92M | -64.35M | 637.58M |
Nextdoor Holdings Technical Analysis
Neutral
1.75
Price Trends
1.93
Negative
1.92
Negative
1.87
Negative
Market Momentum
-0.06
Negative
46.83
Neutral
69.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NXDR, the sentiment is Neutral. The current price of 1.75 is above the 20-day moving average (MA) of 1.74, below the 50-day MA of 1.93, and below the 200-day MA of 1.87, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 46.83 is Neutral, neither overbought nor oversold. The STOCH value of 69.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NXDR.
Nextdoor Holdings Risk Analysis
Nextdoor Holdings disclosed 55 risk factors in its most recent earnings report. Nextdoor Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nextdoor Holdings Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $568.10M | 6.00 | 53.19% | ― | 57.83% | 293.63% | |
71 Outperform | $1.37B | 9.88 | 20.02% | ― | 5.35% | 33.74% | |
64 Neutral | $399.24M | 19.16 | 5.42% | ― | 12.68% | 133.00% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
55 Neutral | $641.09M | 25.11 | 783.82% | ― | 64.86% | -112.92% | |
51 Neutral | $678.68M | -12.43 | -12.25% | ― | 6.65% | 50.32% | |
41 Neutral | $514.33M | -3.62 | ― | ― | -0.76% | -635.75% |
* Communication Services Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.