ASTS Rides on Expanding Partner Base: Will it Drive Revenue Growth?

AST SpaceMobile, Inc. ASTS recently announced that it has formed a collaboration with TELUS Corporation, a leading telecommunication service provider in Canada. TELUS will leverage ASTS’ robust space-based connectivity infrastructure to provide satellite-based cellular service across Canada.

Despite rapid 5G expansion, a vast portion of the United States is still outside of the network coverage area. Geographical challenges and sparsely populated areas make it economically unviable to deploy network connectivity for service providers. Moreover, poor connectivity and dead zones remained a major issue in many urban locations as well. By partnering with ASTS, TELUS aims to address these issues. The service will allow end users to send texts, make voice calls, and use mobile data in regions where legacy network services are inconsistent.

TELUS currently boasts a comprehensive 4G LTE and 5G network infrastructure. The company is set to rapidly invest in developing ground-based satellite infrastructure to integrate satellite connectivity with its mobile network. Moreover, TELUS is also set to become an equity shareholder in ASTS, indicating that this is not just a service agreement but the beginning of a long-term cooperation in the connectivity domain.

Other Companies Expanding Into Satcom Space

AST SpaceMobile has strategically partnered with leading telecom companies to grant customers easy access to their technology. Collaborations with Rakuten, AT&T, Inc. T and Verizon Communications, Inc. VZ have expanded its international footprint.

In Mid-2024, Verizon formed a strategic partnership with ASTS to deliver direct-to-cellular service across the country for the former’s customers. Verizon pledged $100 million in this venture. The deal aims to target 100% coverage across the United States, leveraging Verizon’s industry-leading terrestrial network, multi-operator premium 850 MHz cellular spectrum and ASTS powerful commercial communication arrays in low-earth orbits. Recently, Verizon demonstrated significant advancements in satellite-to-cellular connectivity in collaboration with ASTS.

ASTS has also entered into a definitive agreement with AT&T. The commercial agreement extends until 2030, to offer a space-based direct-to-mobile technology that complements and integrates with the 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’ Price Performance, Valuation and Estimates

AST SpaceMobile shares have skyrocketed 210.3% over the past year compared with the industry’s growth of 51.5%.

From a valuation standpoint, AST SpaceMobile trades at a forward price-to-sales ratio of 133.41, well above the industry average of 5.07.

The Zacks Consensus Estimate for ASTS’ earnings for 2026 and 2027 has declined over the past 60 days.

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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