Excitement is growing for AST SpaceMobile's (ASTS +10.71%) initial commercial satellite launch in the first half of September. The stock has soared in anticipation of the launch of the company's five commercial BlueBird satellites, which are in Cape Canaveral awaiting the upcoming launch window.
Scotiabank analyst Andres Coello thinks investors should own AST stock for several reasons and just raised his price target from $28 to $45.90 per share. That implies a gain of about 47% from Tuesday's close. And that comes after the stock had soared 400% for the year, through Tuesday's close.
NASDAQ: ASTS
Key Data Points
Becoming a global wireless leader
But Coello didn't raise the firm's price target just because of the launch event. In a research note this week, Coello wrote that the "buy rating is not based on a short-term trading opportunity, but on the company's potential to become the world's largest wireless company by subscribers." That could come by tapping the massive global population currently without internet access.
Coello's optimism about AST's business is premised on two main factors. First, that expected revenue from FirstNet is estimated to reach $150 million in 2026, rather than the previous assumption of $60 million. FirstNet, run by AT&T, is the nationwide public safety network built for emergency response. It has plans to use AST's satellite network. The analyst also sees lower funding costs contributing to a higher valuation.
As AST's business model matures and it hits more milestones, funding costs should drop. That could attract more investors to AST SpaceMobile. But there are still many moving parts with this early stage company. Scotiabank had just raised its price target to $28 less than two weeks ago.
That shows how fast the estimates and the situation could change. Investors interested in AST stock should have the proper risk tolerance for such an investment. But it has the potential to be a speculative winner over the long term.
