ASTS Almost Doubles in 6 Months: Worth Including in Your Portfolio?

AST SpaceMobile, Inc. ASTS has gained 91% over the past six months compared with the industry’s growth of 17.4%. It has also outperformed its peers like Aviat Networks, Inc. AVNW and Comtech Telecommunications Corp. CMTL over this period. While Aviat gained 13.6%, Comtech was up 21.1%. 

Six-Month ASTS Stock Price Performance

ASTS Rides on Bluebird Satellite Deployments

AST SpaceMobile recently announced that it is on track to deploy about 45-60 satellites in orbit by the end of 2026. The company has already deployed its first five commercial satellites (dubbed BlueBird) in LEO, marking a key advancement in developing a space-based mobile network infrastructure. These satellites have the largest-ever commercial communications arrays spanning 693 square feet. They offer non-continuous service across the United States using more than 5,600 cells within the premium low-band spectrum. 

This achievement follows the success of the company's in-orbit BlueWalker 3 satellite, creating a space-based cellular broadband network that can directly link with mobile devices, eliminating the need for ground-based infrastructure. By expanding its connectivity to remote areas, AST SpaceMobile aims to ensure that more people have access to vital communication services.

AST SpaceMobile has completed the assembly of microns for phased arrays of eight Block 2 BlueBird satellites. This will be the largest deployment in LEO for commercial use. Management believes that the larger aperture array will enable greater spectrum reuse, enhanced signal strength and increased capacity, reducing the number of satellites required to achieve service coverage compared to smaller aperture designs. This is likely to provide nationwide intermittent service in the United States by the end of 2025, followed by the United Kingdom, Japan and Canada in the first quarter of 2026.

Partnership With Leading Carriers Lends Support

AST SpaceMobile has partnered with leading carriers such as AT&T Inc. T and Verizon Communications Inc. VZ to tap into a pre-existing pool of cell customers and raise funds to help build a worldwide satellite network. With AT&T, ASTS has entered into a definitive commercial agreement, extending until 2030, to offer a space-based direct-to-mobile technology to complement and integrate with the former’s mobile network. This approach aims to provide customers with connectivity in locations previously deemed unreachable, enhancing AT&T’s industry leadership in utilizing emerging satellite technologies.

ASTS also collaborated with Verizon, wherein the latter made a $100 million commitment for satellite direct-to-cellular service for its customers. The two back-to-back deals sent ASTS’ stock price soaring. It further enhanced cellular coverage in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.

High Operating Costs Plague ASTS

AST SpaceMobile has been adversely impacted by unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility, tariff imposition and geopolitical conflicts. These have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance. In addition, AST SpaceMobile has to continuously customize its network offerings, enhance the cost-effectiveness of its products and services and boost its satellite data networks to remain ahead of the competition, which results in higher operating costs.    

Due to high infrastructure setup costs and research and development expenses for highly sophisticated satellite technology, AST SpaceMobile expects significant expenditures in the upcoming months for building and launching the next crop of satellites in tune with its expansion plans to serve the full spectrum of U.S. subscribers.  

Estimate Revision Trend of ASTS

The Zacks Consensus Estimate for AST SpaceMobile for 2025 and 2026 has widened 92.2% and 105.9%, respectively, to a loss of 98 cents and a loss of 70 cents per share over the past year. The negative estimate revision depicts pessimism about the stock’s growth potential as investors remain skeptical about the success of its business model.  

End Note

The collaboration with leading carriers is seen as a pathway to unlocking the potential of space-based cellular broadband, promising seamless, reliable service across the continental United States. The successful launch of the Bluebird satellites will likely transform network connectivity and help bridge the digital divide, significantly expanding its global presence and enhancing AST SpaceMobile’s capabilities in providing ubiquitous connectivity.

However, with a Zacks Rank #3 (Hold), AST SpaceMobile appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. The downtrend in estimate revisions further portrays skepticism about the business model. Consequently, it might not be a prudent investment decision to bet on the stock at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research