AST SpaceMobile (ASTS +5.33%) stock tumbled 10.8% through 2:30 p.m. ET Wednesday after Scotiabank analyst Andres Coello cut his price target on the shares and downgraded the stock to sector underperform (i.e., "sell").
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Why Scotiabank dislikes AST SpaceMobile stock
AST SpaceMobile famously signed up a series of marquee telecom names, including Verizon (VZ +1.10%) and AT&T (T +0.83%), to market its services to their customers. Yet Coello says AST lacks even one "single retail customer" signed up on its own. The company has committed to launching roughly "50 satellites" by "late 2026 or early 2027," but in 2025 was able to launch only one, and it has only six satellites total in service today.
Customer adoption in the U.S. and Japan is described as "slow," and the prices AST has been able to charge are called "modest." Even assuming AST builds and launches all the satellites it has promised, the analyst notes this will entail such high capital spending costs that it will prevent the company from generating positive free cash flow until 2028 or 2029 at the earliest.
Valued at $97.60 per share and $37 billion in market cap (before today's decline), Coello argues the stock's price is "irrational."
NASDAQ: ASTS
Key Data Points
Is AST stock a sell?
Nor is valuation AST's only problem. Coello points out that the SpaceX Starlink system of communications satellites also offers direct-to-cell service, boasts "global brand recognition," and is expanding its service faster. AST is competing with the "unstoppable" Elon Musk, who may soon be swimming in cash from an anticipated $1.5 trillion IPO of SpaceX.
These are not trivial concerns.
At best, Coello thinks AST stock might be worth $55 per share -- 36% less than its current price. This analyst thinks AST stock is a sell, and I agree.
