Roth/MKM sets $42 target on AST Spacemobile stock, rates buy

On Thursday, Roth/MKM initiated coverage of AST Spacemobile (NASDAQ:ASTS), a company developing direct-to-device (D2D) broadband cellular services via satellite, assigning the stock a Buy rating and a $42.00 price target. Trading at $24.14, the stock sits between its 52-week range of $1.99 to $39.08, with analysts maintaining a Strong Buy consensus and targets ranging from $30 to $64. The firm's analysts highlight AST Spacemobile's innovative approach to providing connectivity using existing mobile network operator (MNO) spectrum to reach smartphones globally.

AST Spacemobile is focused on bridging the significant coverage gap that exists today, with 85-90% of the Earth's surface not covered by terrestrial cellular services. According to Roth/MKM, this presents a substantial market opportunity, with an estimated total addressable market (TAM) of over $30 billion by 2030. InvestingPro analysis reveals the company's strong liquidity position, with a current ratio of 7.9x and more cash than debt on its balance sheet, though the stock currently appears overvalued based on InvestingPro's Fair Value calculations.

The analysts express confidence in AST Spacemobile's financial position, noting that the company is near-fully funded. This positions the firm to move forward with its commercialization plans, which are expected to begin in earnest in 2026. With a market capitalization of $7.6 billion and revenue growth forecast of 10.7% for fiscal year 2025, Roth/MKM anticipates that this will lead to a sharp increase in sales growth towards the end of 2026 and into 2027.

The endorsement by Roth/MKM underscores the potential they see in AST Spacemobile's technology and market strategy. The company's efforts to provide global connectivity via satellite could revolutionize the way mobile services are delivered, especially in underserved areas. The analyst's statement emphasizes the readiness of a vast existing base of 5.6 billion unique global smartphone users for AST Spacemobile's upcoming services. Discover more insights about ASTS and access detailed financial analysis through the comprehensive Pro Research Report, available exclusively on InvestingPro, along with 12 additional ProTips and extensive financial metrics.

In other recent news, AST SpaceMobile reported its fourth-quarter 2024 earnings, surpassing analysts' expectations with an earnings per share (EPS) of -$0.18, beating the forecast of -$0.21. Revenue also exceeded projections, reaching $4.42 million against the anticipated $3.22 million. The company has entered into strategic agreements with Ligado Networks to enhance its space-based network capabilities, including long-term access to 45 MHz of lower mid-band spectrum in the U.S. and Canada. This collaboration requires AST SpaceMobile to make an upfront payment of $350 million in cash, with additional annual payments to Ligado Networks. Furthermore, UBS analyst Chris Schoell has raised the price target for AST SpaceMobile shares to $38, maintaining a Buy rating, due to the company's recent advancements, including successful satellite tests and expanded carrier agreements. AST SpaceMobile has secured launch capacity for 60 satellites, with plans to produce six satellites per month by the second half of 2025. The company is also exploring $500 million in quasi-government funding and non-dilutive financing options to support its expansion efforts. These developments indicate significant progress in AST SpaceMobile's strategic initiatives and financial performance.

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