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Investing.com - Barclays downgraded AST Spacemobile (NASDAQ:ASTS) from Overweight to Underweight on Friday, maintaining a price target of $60.00 as the stock has doubled since the firm’s last update. According to InvestingPro data, ASTS has delivered an impressive YTD return of 324%, with significant volatility reflected in its beta of 2.41.
The stock has surged from $48 to $95.70 per share following several positive developments, including confirmation that launches of next-generation Blue Bird 2 satellites will begin in 2025, with plans to deploy 45-60 satellites by year-end 2026 despite recent delays. InvestingPro analysis indicates the stock is currently in overbought territory, with multiple technical indicators suggesting elevated valuations. Get access to 16+ additional ProTips and comprehensive analysis with InvestingPro.
AST Spacemobile has also finalized a deal with Verizon to provide direct-to-device services in the United States and successfully tested its services with Bell Canada, which announced plans to offer direct-to-device services for $10-15 monthly based on AST’s constellation.
Barclays notes these developments align with its expectations and estimates, calculating an upside valuation of $125 per share based on a 10% weighted average cost of capital (WACC), representing approximately 30% potential upside from current levels.
The firm believes a higher WACC is appropriate at this stage given AST has only five satellites launched, with its second-generation satellites being significantly larger than previous versions and untested in space, while noting elevated short interest at approximately 16% of shares outstanding could magnify any positive news.
In other recent news, AST SpaceMobile has been active with several notable developments. The company announced a definitive commercial agreement with Verizon to provide direct-to-cellular satellite service starting in 2026. This partnership will allow Verizon customers to connect their standard smartphones directly to satellites, enhancing connectivity without the need for specialized equipment. Additionally, AST SpaceMobile recently filed to sell up to $800 million in Class A common stock through an at-the-market offering program, engaging multiple investment banks as sales agents.
In a separate development, AST SpaceMobile successfully conducted a space-based direct-to-cell test in collaboration with Bell, demonstrating capabilities such as 4G voice calls, video calls, and broadband data connectivity. Despite these advancements, Scotiabank downgraded AST SpaceMobile from Sector Perform to Sector Underperform due to valuation concerns, setting a price target that implies a significant downside potential. The downgrade was influenced by the company’s delay in shipping its first BB2 satellite to India, now scheduled for October 12. These developments reflect AST SpaceMobile’s ongoing efforts to expand its satellite communication services while navigating market challenges.
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