AST SpaceMobile slips after satellite deployed too low

AST SpaceMobile (ASTS) is trading lower on Monday after Blue Origin’s flagship New Glenn rocket failed to place one of its satellites into the intended orbit. During the New Glenn 3 mission, the BlueBird 7 satellite was deployed into a lower than planned orbit by the rocket’s upper stage. The company said the altitude is too low for its on board thrusters to sustain operations, and the satellite will be de-orbited.

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While the satellite cost is expected to be covered by insurance, Clear Street told investors that it now anticipates delays to AST’s 45 to 60 satellite target by year-end 2026.

BLUEBIRD 7 DO DE-ORBIT: AST SpaceMobile addressed the orbital launch of BlueBird 7 on the New Glenn launch vehicle. During the New Glenn 3 mission, BlueBird 7 was placed into a lower than planned orbit by the upper stage of the launch vehicle. While the satellite separated from the launch vehicle and powered on, the altitude is too low to sustain operations with its on-board thruster technology and will de-orbited. The cost of the satellite is expected to be recovered under the company’s insurance policy. BlueBird 7 would have been AST SpaceMobile’s eighth deployed into low Earth orbit and is one of many planned for its space-based cellular broadband network. The company is currently in production through BlueBird 32, with BlueBird 8 to 10 expected to be ready to ship in approximately 30 days. The company continues to expect an orbital launch every one to two months on average during 2026, supported by agreements with multiple launch providers, and it continues to target approximately 45 satellites in orbit by the end of 2026.

DELAYS TO YEAR-END TARGET: Clear Street lowered the firm’s price target on AST SpaceMobile to $115 from $137 and keeps a Buy rating on the shares after Blue Origin’s New Glenn 3 mission experienced a second stage malfunction, resulting in AST’s BlueBird 7 satellite being deployed into a lower-than-planned orbit. While the roughly $23M satellite cost is expected to be covered by insurance, the firm now anticipates delays to AST’s 45 to 60 satellite target by year-end 2026.

THE BEAT GOES ON: Following the events over the weekend, William Blair told investors that even though shares of AST SpaceMobile will likely be under pressure on Monday, “the beat goes on.” The company gained experience integrating its satellite with New Glenn and working with the Blue Origin team. This experience will be integral for future missions, the firm argued. The silver lining, in William Blair’s opinion, is that there was only one satellite on board, whereas future New Glenn launches may have as many as eight of AST’s BlueBirds. AST expects to ship its next group of satellites in the next 30 days.

The firm continues to believe that many of AST’s mobile network operator partners will likely begin customer trials later this year when the company’s network reaches approximately 25 satellites. William Blair has a Market Perform rating on the shares.

PRICE ACTION: In morning trading, shares of AST have dropped about 8% to $78.64.