ASTS Declines 15.6% in the Past 3 Months: Reason to Worry?

AST SpaceMobile, Inc. ASTS has plunged 15.6% over the past three months against the industry’s growth of 2.8%. It has also underperformed its peers like Aviat Networks, Inc. AVNW and Comtech Telecommunications Corp. CMTL over this period. While Aviat gained 5.4%, Comtech was up 12%. 

Three-Month ASTS Stock Price Performance

What Ails ASTS?

Much of this malaise was due to lackluster first-quarter 2025 results, with both the adjusted earnings and revenues missing the Zacks Consensus Estimate. Unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility, tariff imposition and geopolitical conflicts, are negatively impacting the company’s operations. These factors have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance.

Estimate Revision Trend of ASTS

The Zacks Consensus Estimate for AST SpaceMobile for 2025 and 2026 has widened 10.1% and 116.7%, respectively, to a loss of 87 cents and a loss of 78 cents per share over the past 60 days. The negative estimate revision depicts pessimism about the stock’s growth potential as investors remain skeptical about the success of its business model.  

ASTS' SpaceMobile Redefining Connectivity

Despite the short-term hiccups, ASTS is leveraging the first and only space-based cellular broadband network to radically transform cellular connectivity with direct-to-cell technology. It boasts a diverse portfolio of more than 3,650 patent and patent-pending claims worldwide for the direct-to-cell satellite ecosystem from space to Earth.

The SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones. It is based on a novel technology that delivers broadband connectivity from space to unmodified mobile devices, providing a service to fill cellular coverage gaps in a differentiated approach compared to other space-based communication services.

ASTS Bets Big on Bluebird Satellites

AST SpaceMobile has deployed its first five commercial satellites, dubbed Bluebird, in low Earth orbits, 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 AST SpaceMobile's in-orbit BlueWalker 3 satellite. It marks significant progress in the company's mission to create a space-based cellular broadband network that directly links with mobile devices, eliminating the need for ground-based infrastructure. By expanding its connectivity to remote areas, the company aims to ensure that more people have access to vital communication services.

ASTS Collaborates With Leading Carriers

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 avail 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.

End Note

The collaboration with leading MNOs 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 to cash in on its long-term fundamentals. The downtrend in estimate revisions further portrays skepticism about the company’s business model. It has underperformed its peers in the short term. 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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