ASTS Shares Zoom on Upcoming BlueBird 6 Launch: Worth Buying Now?

AST SpaceMobile, Inc. ASTS shares were up 18.3% yesterday, driven by the euphoria related to its upcoming BlueBird satellite launch on Dec. 15. The uptrend was also buoyed by OpenAI CEO Sam Altman’s rumored interest in acquiring a stake in a rocket company to better compete with Elon Musk’s private firm SpaceX. Market speculation about a multi-billion-dollar investment by Altman propelled the shares of almost all satellite-based companies, including AST SpaceMobile, as the industry scouts for more such investments for a highly capital-intensive business model.

ASTS Geared Up for Bluebird 6 Launch

AST SpaceMobile is slated to launch BlueBird 6, the first of its next-generation satellites, from the Satish Dhawan Space Center in India. Featuring the largest commercial phased array in low Earth orbit (LEO) at nearly 2,400 square feet, the satellite will reportedly mark a 3.5x increase in size over its predecessors (BlueBird 1-5) with 10x data capacity. This is likely to strengthen its position as one of the leading space-based cellular broadband service providers in the market.

AST SpaceMobile is reportedly 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 feature commercial communications arrays spanning 693 square feet, offering 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.

ASTS’ Collaboration With Leading Carriers Lends Support

AST SpaceMobile had 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 that complements and integrates with T’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, which made a $100 million commitment for satellite direct-to-cellular service for its customers. The deals enhanced cellular coverage in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.

Price Performance

AST SpaceMobile stock has surged 186.9% over the past year compared with the industry’s growth of 16.8%. It has also outperformed its peers like Aviat Networks, Inc. AVNW and Comtech Telecommunications Corp. CMTL over this period. While Aviat gained 18.5%, Comtech fell 7.3% over the same period.

One-Year ASTS Share Price Performance 

High Operating Costs Mar ASTS Prospects

Despite the uptrend, 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 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 135.6% and 196%, respectively, to a loss of $1.06 and a loss of 74 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 unlock the potential of space-based cellular broadband, promising seamless, reliable service across the continental United States and Canada. The upcoming launch of the BlueBird 6 satellite 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 exercise 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.

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

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