What happened

Shares of Globalstar (NYSEMKT:GSAT) fell on Friday, following bearish analyst remarks. As of 11:20 a.m. EST, the satellite communication specialist's stock price was down 15%. 

So what

Morgan Stanley analyst Simon Flannery cut his rating on Globalstar's stock from equal weight to underweight and placed a $0.55 price forecast on its shares. Flannery's price estimate implies a potential downside risk for investors of roughly 48% from the stock's current price near $1.06.

A person is pointing to a digital stock chart that rises sharply and then falls.

Globalstar's shareholders could suffer sizable losses, according to an analyst at Morgan Stanley. Image source: Getty Images.

With Globalstar's share price quadrupling in recent months, Flannery posits that investors are valuing the company's spectrum assets at $2.2 billion. But he cautions that Globalstar may find it difficult to monetize these assets, as he does not see any significant sales taking place in the near future.

Now what

Globalstar's stock price soared in recent weeks following deals with Nokia and Battlbox. Nokia is working with Tideworks Technology to deploy Globalstar's Band 53 spectrum at the Port of Seattle. Meanwhile, Battlbox subscribers will receive a Gen GPS Messenger device from Globalstar's SPOT subsidiary as part of their monthly subscription box service.

Yet, although these deals are certainly positives for Globalstar, they likely don't justify the sharp upward move in its stock price so far this year. Investors, therefore, may want to consider taking profits in Globalstar.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.