An NOL (net operating loss) happens if a company loses money one year. In most jurisdictions, the company can spread this loss around to reduce their taxable income in future years and therefore reduce their taxes. There are usually restrictions on how many years you can go back when calculating your NOLs and how many years you can carry them forward to shield against taxes.
NOLs can be valued by finding the net present value (NPV) of the tax savings. For example, if a company lost $100M and is allowed to spread this loss over the next 5 years, then we would take each annual savings of $20M and discount it to the present period to find the NPV of the NOLs. They would be discounted at the cost of equity since NOLs are after-interest and flow to equity holders.