Last Update 19 Jan 26

Fair value Decreased 2.72%

GSAT: Hybrid Spectrum And Apple Partnership Will Shape Potential Sale Talks

Narrative Update on Globalstar

Analysts have lifted their price target on Globalstar to US$71 from US$66, citing what they see as a de risked satellite services business backed by Apple and underused terrestrial spectrum. They state that these factors, along with expected benefits from U.S. space policy and XCOM Radio Access Network's commercial traction, feed into updated valuation inputs for fair value, discount rate, revenue growth, profit margin and future P/E.

Analyst Commentary

Recent research focuses on Globalstar as what some bullish analysts call a "compelling hybrid investment," pointing to the mix of satellite services and terrestrial spectrum. Their updated work feeds directly into refreshed assumptions for fair value, discount rate, revenue growth, profit margins and future P/E. It is worth breaking down what they are excited about and where investors might want to be more cautious.

Bullish Takeaways

Support from Apple for the satellite services business is viewed by bullish analysts as a key pillar for execution. This support helps them feel more comfortable with forecasts around service adoption and cash flow visibility.
Terrestrial spectrum assets are described as "valuable and underutilized." Bullish analysts see this as an option on future growth and a reason to justify higher valuation inputs such as fair value and future P/E multiples.
References to a "de risked" satellite services business feed into more confident revenue and profit margin assumptions. Analysts see less binary risk around the core operations than in earlier stages of the company.
Analysts also point to U.S. space policy and XCOM Radio Access Network's commercial momentum as supportive for potential government services revenue. They incorporate this into higher long term growth and margin scenarios.

Bearish Takeaways

While satellite services are viewed as "de risked," the reliance on a small number of high profile partners such as Apple can still create concentration risk if relationships or technical requirements change.
Terrestrial spectrum is characterized as "underutilized," which hints at execution risk around monetization and timing, and may limit how quickly the value of these assets can be reflected in earnings and cash flows.
Assumptions that U.S. space policy and XCOM Radio Access Network momentum will feed into government services estimates depend on policy continuity and commercial follow through. Both of these factors can shift and affect actual growth relative to current models.
Higher valuation inputs for fair value and future P/E leave less room for error if revenue growth or profit margins do not match the updated expectations. This increases the sensitivity of the investment case to execution outcomes.

What's in the News

Reports indicate Globalstar has been exploring a potential sale and has held early talks with Elon Musk's SpaceX and other possible suitors, with an investment bank assisting the process, while there is no certainty a transaction will occur (Bloomberg / M&A rumors).
Separate reporting says Globalstar is weighing potential buyers, with SpaceX cited among interested parties, reinforcing the theme of active suitor interest around the company (Bloomberg).
The chair, James Monroe, has reportedly discussed the idea of selling Globalstar for more than US$10b, compared with a market capitalization cited at US$5.3b in the report. Commentary suggests any such deal could affect how closely Apple and Globalstar work together and links SpaceX satellite designs to the radio spectrum used for current iPhone satellite features (The Information / M&A rumors).
Globalstar reaffirmed 2025 revenue guidance in a range of US$260 million to US$285 million, giving investors a reference point for management's current outlook on the top line (Corporate guidance).
The company announced the commercial availability of its RM200M two way satellite IoT module, designed to provide low cost, low power global connectivity for applications such as logistics, transportation, energy, agriculture and environmental monitoring, with the module already in use across multiple regions (Product announcement).

Valuation Changes

Fair Value: revised from US$67.50 to US$65.67, representing a modest reduction in the modeled share value.
Discount Rate: essentially unchanged at 6.96%, indicating a steady view of overall risk in the model.
Revenue Growth: adjusted from 16.75% to 15.02%, reflecting slightly more conservative top line expectations.
Net Profit Margin: increased from 15.04% to 15.72%, indicating a small uplift in expected profitability.
Future P/E: moved from 168.52x to 163.94x, suggesting a slightly lower valuation multiple in the updated work.

Expansion of government partnerships and spectrum monetization diversifies revenue streams and strengthens long-term financial stability.
Upgrades in satellite infrastructure and adoption of new IoT modules drive network growth, subscriber increases, and higher margins.
Long sales cycles, high capital needs, strong competition, regulatory hurdles, and dependency on major deals risk revenue growth, margins, and financial stability.

Catalysts

About Globalstar

Provides mobile satellite services in the United States, Canada, Europe, Central and South America, and internationally.What are the underlying business or industry changes driving this perspective?

Continued expansion of government and defense partnerships, including new agreements with U.S. federal agencies and the Parsons relationship, is expected to drive higher recurring revenue as demand for resilient, mission-critical satellite connectivity grows in response to infrastructure vulnerabilities and natural disasters, supporting both top-line growth and improved visibility.
The global rollout of the RM200 2-way module with over 50 partners in advanced testing signals accelerating adoption across industrial, defense, and commercial IoT markets as more assets require always-on connectivity, increasing subscriber numbers and raising ARPU, ultimately benefiting future revenue and margin expansion.
Ongoing upgrades to ground infrastructure and the deployment of next-generation satellites (C-3 system and new launches with SpaceX) will boost network capacity, reach, and performance, enabling Globalstar to meet rising demand for hybrid and direct-to-device solutions, thus supporting long-term service revenue and higher discretionary earnings.
Progress in monetizing proprietary spectrum assets (notably Band 53/n53), including new licensing and international expansion, facilitates new revenue streams from terrestrial and hybrid wireless markets-a diversification that enhances revenue stability and long-term earnings power.
Advancements in software-defined radio (XCOM RAN) and Network-as-a-Service models create new opportunities to capture enterprise and horizontal markets (beyond initial customers), capitalizing on the convergence of satellite and terrestrial networks to drive incremental service and licensing revenues with improved gross margins.

Globalstar Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Globalstar's revenue will grow by 13.7% annually over the next 3 years.
Analysts assume that profit margins will increase from -18.8% today to 19.6% in 3 years time.
Analysts expect earnings to reach $75.2 million (and earnings per share of $0.38) by about September 2028, up from $-49.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 108.8x on those 2028 earnings, up from -78.2x today. This future PE is greater than the current PE for the US Telecom industry at 15.4x.
Analysts expect the number of shares outstanding to grow by 0.41% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Globalstar Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company faces long sales cycles and customer delays in both the enterprise terrestrial and government verticals, which may limit predictable revenue growth and introduce volatility in achieving revenue targets in the medium to long term, potentially impacting net earnings.
Persistent high capital expenditure requirements for satellite replenishment, ground infrastructure build-out (such as adding 90 antennas across 35 ground stations), and technology development (e.g., XCOM RAN) could outpace internal cash generation and place pressure on free cash flow, increasing risk of dilution or higher-cost debt, which could suppress net margins.
Competitive threats from alternative connectivity options-including continued advances in terrestrial 5G and 6G networks, and well-funded LEO satellite rivals (like Starlink and Kuiper)-could erode Globalstar's pricing power and customer base, pressuring both revenue and ARPU in the long run.
Regulatory complexities, especially regarding spectrum sharing, dual licensing, and international terrestrial license approvals, may introduce delays, additional costs, or constrain market access; this raises operational risk and could significantly impact long-term revenue and profitability.
The company's ability to expand through strategic partnerships (such as with Parsons or defense agencies) hinges on initial customer success and adoption, but over-reliance on a small number of key contracts or verticals creates earnings volatility and could hurt net margins if major customer deals are delayed, downsized, or lost.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $52.5 for Globalstar based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $60.0, and the most bearish reporting a price target of just $45.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $383.1 million, earnings will come to $75.2 million, and it would be trading on a PE ratio of 108.8x, assuming you use a discount rate of 6.8%.
Given the current share price of $30.25, the analyst price target of $52.5 is 42.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Satellite And Spectrum Expansion Will Drive Opportunity Amid Potential Sale