TLDR
- B.Riley downgraded AST SpaceMobile (ASTS) to Neutral from Buy on Monday.
- The firm cut its price target to $65 from $85, a 24% reduction.
- ASTS stock fell 3% in early trading to $57.04.
- Analyst Mike Crawford cited growing competition from Viasat and Space42’s Equatys venture.
- Wall Street still rates ASTS a Moderate Buy with 56% average upside.
AST SpaceMobile (ASTS) stock slipped 3% Monday after B.Riley downgraded the shares to Neutral from Buy. The stock traded at $57.04 following the call.
Analyst Mike Crawford also trimmed his price target to $65 from $85. That’s a cut of roughly 24%.
Even with the lower target, it still implies about 14% upside from Friday’s close. Crawford said the risk and reward picture has “swung back toward balance” after the stock’s recent run.
The downgrade isn’t about AST SpaceMobile’s technology. Crawford still believes in the company’s ability to build a broadband direct-to-device network.
His worry is pricing. New competitors are lining up, and that could squeeze what AST SpaceMobile can charge consumers.
Where the Competition Is Coming From
Crawford pointed to Viasat and Space42’s joint venture, called Equatys, as the main threat. The venture is eyeing a constellation of up to 2,800 satellites, with launches possibly starting in 2028.
Equatys is also looking for more partners. Crawford flagged Rocket Lab as one potential addition worth watching.
Rocket Lab holds 8.725 MHz of L-band spectrum picked up from Iridium. If Rocket Lab joined Equatys, Crawford thinks the pressure on AST SpaceMobile would grow.
That’s a lot of satellites potentially chasing the same customers. For now it’s speculation, but it’s the kind of scenario analysts like to price in early.
Crawford also wants to see real numbers before turning positive again. He’s looking for data on mobile network operator subscriber uptake and service plan pricing.
Those numbers haven’t shown up yet. Until they do, he’s content to sit on the sidelines.
The Bigger Picture for ASTS
The downgrade comes on the heels of several operational wins for the company. AST SpaceMobile recently shipped BlueBirds 14, 15, and 16 from its Midland, Texas facility to Cape Canaveral.
It also confirmed full deployment of BlueBird 11. That came about 35 days after BlueBirds 12 and 13 launched successfully alongside it on August 5.
So the hardware side of the business is moving along fine. The question mark is squarely on pricing and demand.
AST SpaceMobile is still unprofitable. Revenue over the past twelve months came in at $115.3 million, a small figure against the company’s $22.2 billion valuation.
Not every analyst agrees with B.Riley’s caution. Berenberg initiated coverage with a Buy rating and a $92 target, citing AST SpaceMobile’s lead in cellular broadband from space.
Cantor Fitzgerald also raised its target to $90, keeping an Overweight rating. So the Street is split on how worried to be about Equatys and friends.
On TipRanks, ASTS carries a Moderate Buy consensus built on 6 Buy and 5 Hold ratings. The average price target sits at $88.98, implying 56% upside from current levels.
Price targets among analysts range widely, from a low of $50.80 to a high of $115. That spread says a lot about how unsettled the pricing debate still is.
Separately, AST SpaceMobile has reportedly shown interest in acquiring spectrum licenses from Grain Management LLC, a deal valued at $6 billion. Those licenses are seen as useful for direct-to-space wireless service.
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