AST SpaceMobile, Inc. ASTS reported modest fourth-quarter 2024 results, with adjusted earnings beating the Zacks Consensus Estimate but revenues missing the same.

Net loss was $35.9 million or a loss of 18 cents per share compared with a net loss of $31.9 million or a loss of 35 cents per share in the year-ago quarter. ASTS reported a non-GAAP net loss of 12 cents per share, narrower than the Zacks Consensus Estimate of loss of 14 cents. Quarterly revenues were $1.92 million, which missed the consensus estimate of $3 million.

SpaceMobile: ASTS’ Key Growth Driver

ASTS is transforming connectivity with direct-to-cell technology, leveraging the first and only space-based cellular broadband network. It boasts a diverse portfolio of more than 3,450 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 Rides 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.

Carrier Agreements Lend Support to ASTS Growth Curve

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 has 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. The carrier agreements have lent stability to the company’s steady revenue stream, which witnessed an uptrend over the past few quarters. 

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Price Performance of ASTS

ASTS has gained a stellar 990.8% over the past year compared with the industry’s growth of 47.6%. It has also outperformed its peers like Aviat Networks, Inc. AVNW and Comtech Telecommunications Corp. CMTL over this period.

One-Year ASTS Stock Price Performance

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ASTS Margin Woes Continue

Owing to high infrastructure set-up costs and research and development expenses for a highly sophisticated technology for developing satellites, AST SpaceMobile has reported losses for the past few years. Management also envisions 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. This has made ASTS a high-risk investment option.

Estimate Revision Trend of ASTS

The Zacks Consensus Estimate for AST SpaceMobile for 2025 has decreased to a loss of 66 cents per share from a loss of 45 cents in the past 30 days, while that of 2026 has narrowed 8% to a loss of 23 cents. The negative estimate revision depicts bearish sentiments about the stock’s growth potential.  

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End Note

The collaboration with leading carriers is seen as a pathway to unlocking the potential of space-based cellular broadband, promising seamless, reliable service across the continental United States. The deployment 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 to provide ubiquitous connectivity. 

However, the downtrend in estimate revisions portrays bearish sentiments about the company. With a Zacks Rank #5 (Strong Sell), ASTS appears to be a risky investment option at the moment. Consequently, investors should be better off if they avoid investing in this stock.

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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