Will Growing Prowess in Satellite Communication Drive Growth for ASTS?

AST SpaceMobile ASTS is benefiting from a growing client base in the public and private sectors backed by its robust satellite connectivity portfolio. ASTS is committed to bringing a premium broadband experience directly to smartphones from space, with up to 120 Mbps data speed.

The company is acquiring 60 MHz of global S-Band spectrum priority rights. This will allow the company to expand its subscriber capacity and bring several services to target markets. The company is also aiming to secure long-term access to 45 MHz of L-Band, premium lower mid-band spectrum, in the United States and Canada. In addition to these, ASTS has ramped up commercialization efforts by expanding its partner base. The company has formed a collaboration with major telecom operators Vodafone Idea, Verizon and AT&T. 

ASTS is steadily developing its Block 2 BlueBird satellites. It is well on track to complete 45-60 satellite launches in 2025 and 2026. This will significantly bolster its space-based network infrastructure and drive customer growth. In the second quarter, the company inked two early-stage contracts with the U.S. government, bringing the total to eight contracts to date. ASTS is also expanding its manufacturing footprint in the U.S and Europe facilities to support the growing demand trends. The company’s multi-dimensional expansion strategy puts it in an advantageous position in the emerging space-based connectivity domain.

How Are Competitors Faring?

ASTS faces competition from Viasat, Inc. VSAT and Iridium Communications Inc. IRDM in the satellite communication space. Viasat is ramping up investments in the development of its revolutionary ViaSat-3 broadband communications platform, which will have nearly 10 times the bandwidth capacity of ViaSat-2. These satellites will be capable of covering one-third of the world, including all of the Americas. 

Iridium’s mobile and satellite communication network leverages the advanced interlinked mesh architecture of 66 operational satellites to provide a global reach of its services across numerous territories. The company has been making solid investments to boost its technology infrastructure. Deutsch Telekom recently formed a collaboration with Iridium to integrate Iridium NTN across its network infrastructure.

ASTS’ Price Performance, Valuation and Estimates

Over the past year, shares of AST SpaceMobile have gained 45.5% compared with the industry’s growth of 34.1%.

Going by the price/sales ratio, the company’s shares currently trade at 73.14 forward sales, much higher than the industry average.

ASTS is currently witnessing an uptrend in estimate revisions.

AST SpaceMobile currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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