AST SpaceMobile (ASTS) Valuation in Focus After First Five Satellites Successfully Deployed

AST SpaceMobile (ASTS) just achieved a major step forward, successfully deploying its first five commercial satellites. This is a tangible milestone in the company’s plan to build out a space-based cellular broadband network, aiming for direct connectivity to standard smartphones with no new hardware required. With plans to roll out another 40-plus satellites over the next year and a half, all eyes are on how fast AST SpaceMobile can translate these technical achievements into commercial returns, especially with big names like AT&T and Verizon ready to support nationwide service launches.

The stock’s action has mirrored this sense of anticipation. Over the past year, AST SpaceMobile has posted a 39% gain, far outpacing the broader telecom sector. Momentum has sharply accelerated since spring, with the stock rising an impressive 89% in the past three months, despite some recent pullbacks. Investors are weighing several developments, from upbeat earnings that showed double-digit annual revenue growth, to the expanding satellite network and deepening carrier partnerships. There is plenty of ambition, but market sentiment also reflects the risks and cash burn that come with building new infrastructure from scratch.

After such a run, investors have to ask whether AST SpaceMobile is a bargain with more upside, or if today’s price already reflects the company’s future growth story.

Price-to-Book of 14.6x: Is it justified?

Based on the price-to-book valuation metric, AST SpaceMobile appears expensive when compared to both its peer group and the broader US Telecom industry. The company's price-to-book ratio of 14.6 is significantly higher than the peer average of 4.5 as well as the industry average of 1.5.

The price-to-book ratio is a common way to value companies, especially those with tangible assets, as it compares a firm's market value to its book value. In the telecom sector, this helps assess whether a company's current market price is supported by its underlying net assets. For AST SpaceMobile, its high ratio may reflect investor optimism or the value assigned to its future growth potential, even in light of current unprofitability and limited revenue.

This premium suggests the market is factoring in strong expected developments and future profitability. At the same time, it means AST SpaceMobile will need to deliver on its growth drivers in order to support these valuations over time.

Result: Fair Value of $47.07 (OVERVALUED)

See our latest analysis for AST SpaceMobile.

However, steep cash burn and ongoing unprofitability remain key risks. These concerns are especially relevant if execution delays or cost overruns challenge the company's ambitious rollout timeline.

Find out about the key risks to this AST SpaceMobile narrative.

Another View: Discounted Cash Flow Perspective

While multiples suggest AST SpaceMobile is priced at a premium, our DCF model presents a completely different perspective. It indicates the shares could actually be undervalued. Could investors be missing a potential opportunity, or is the market recognizing factors that models cannot capture?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AST SpaceMobile for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own AST SpaceMobile Narrative

If you want to dig deeper or have your own perspective, you can easily interpret the data and form your own view in just minutes. So why not do it your way?

A great starting point for your AST SpaceMobile research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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