AST SpaceMobile (ASTS 2.26%), a producer of low Earth orbit (LEO) satellites for cellular connections, isn't a household name to many investors. However, its stock has rallied more than 330% over the past 12 months as the Nasdaq Composite rose less than 20%.
Let's see why AST has quietly crushed the market -- and where it might go over the next year.
Why is AST SpaceMobile attracting so much attention?
Many rural areas still aren't adequately covered by terrestrial cellular towers. AST fills in those gaps by beaming 2G, 4G, and 5G signals from its LEO satellites. It delivers its data through low- to mid-band spectrums, which operate at lower speeds but offer broader coverage than the higher-band spectrums used by its larger competitor, SpaceX's Starlink.
Image source: Getty Images.
Last year, AT&T, Verizon Communications, Vodafone, and Rakuten all partnered with AST to expand their 5G networks with its LEO satellites. Those partnerships helped it keep up with Starlink, which signed similar deals with T-Mobile US, Rogers Communications, and other telecom leaders.
When AST went public by merging with a special purpose acquisition company (SPAC) four years ago, the bears dismissed it as another speculative space stock that would struggle to achieve its ambitious goals. But last September, it launched its first five Block 1 BlueBird (BB1) commercial satellites. This January, the Federal Communications Commission (FCC) granted it a temporary authorization to start testing AT&T's and Verizon's networks with those satellites.
AST aims to launch its first four Block 2 BlueBird (BB2) satellites, which will be 3.5 times larger than its BB1 satellites and process about 10 times more data, within the next two months. It plans to eventually expand its "constellation" to 243 LEO satellites, but that long-term expansion would require a much broader approval from the FCC.
Nevertheless, AST's successful BB1 launch, its growing number of telco partnerships, and its bold expansion plans suggest it could grow much bigger. That's probably why its stock skyrocketed, and why its insiders bought 52 times as many shares as they sold over the past 12 months.
But is AST SpaceMobile's stock getting overheated?
In 2024, AST only generated $4 million in revenue but racked up a net loss of $300 million. Those numbers look tiny compared to its market capitalization of $14.9 billion.
But from 2024 to 2027, analysts expect its revenue to grow at a CAGR of 490% to $903 million as it turns profitable by the final year. If it achieves that incredible growth trajectory, then it might seem more reasonably valued (but still expensive) at 16.5 times its 2027 sales.
The global LEO satellite market could grow at a more modest CAGR of 15.5% from 2025 to 2035, according to Market Research Future, but AST might expand at a faster rate than the broader industry as it rapidly expands its fledgling constellation.
However, AST has also increased its number of shares by 381% since it closed its special purpose acquisition company (SPAC) merger through its secondary stock offerings, convertible debt offerings, and its stock-based compensation expenses (which more than doubled to $32 million in 2024).
That dilution, which should continue for the foreseeable future, could keep its valuations elevated. At the end of the first quarter of 2025, AST had $874.5 million in cash, cash equivalents, and restricted cash. It also recently announced another $500 million convertible debt offering. So for now, the company still has enough liquidity to build more satellites and prepare for more launches.
Can AST SpaceMobile keep crushing the market?
AST's stock has rallied sharply in anticipation of its first BB2 launch and the FCC's full approval of its planned satellite constellation. But there's too much enthusiasm priced into its stock right now, and it could easily be cut in half before it doubles again.
Any positive headlines might drive AST's stock higher, but it could struggle to maintain that momentum if the market swoons. Therefore, I'm not certain AST can comfortably outpace the market's gains over the next 12 months.
But over the next decade, it could beat the market if it successfully builds its constellation of 243 LEO satellites and attracts more customers. It's also still tiny compared to Starlink, which had an estimated valuation of $350 billion after a private share sale last December, so it could be worth nibbling on at these prices.
