Analyst Michael Funk of Bank of America Securities reiterated a Hold rating on AST SpaceMobile, retaining the price target of $85.00.
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Michael Funk has given his Hold rating due to a combination of factors concerning AST SpaceMobile’s current operational and financial status. The company is in the early stages of launching its satellite constellation, with significant progress expected in the coming years. Although AST SpaceMobile has secured over $1 billion in contracted revenue commitments from mobile network operators and is pursuing additional government contracts, its current revenue and earnings have not met expectations, with third-quarter revenues falling short of estimates.
Furthermore, the company’s projected capital expenditures are set to increase significantly as it ramps up manufacturing, which presents a financial challenge. The valuation of AST SpaceMobile is based on a discounted cash flow model, reflecting its early-stage status and anticipated high growth. Michael Funk emphasizes the need for AST SpaceMobile to demonstrate successful satellite launches and operations, as well as converting subscribers into revenue, before considering a more optimistic outlook. As such, the Hold rating reflects a cautious stance, awaiting further tangible progress in these areas.
Based on the recent corporate insider activity of 42 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ASTS in relation to earlier this year.