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Investing.com -- AST SpaceMobile (NASDAQ:ASTS) stock fell 3% Friday morning after Barclays downgraded the satellite communications company from Overweight to Underweight with a price target of $60, suggesting significant downside from its previous closing price of $89.50.
Analyst Mathieu Robilliard’s double downgrade comes despite recent positive developments for the company, including confirmation that launches of its next-generation Blue Bird 2 satellites will begin in 2025, a final deal with Verizon to provide direct-to-device services in the US, and successful testing with Bell Canada.
While acknowledging these positive developments, Barclays noted they were already in line with their expectations. The analyst’s upside valuation points to a fair value of $125 per share, representing approximately 30% potential upside, but Robilliard believes a higher weighted average cost of capital (WACC) is appropriate given the company’s early operational stage.
The downgrade highlights several risk factors, including that AST SpaceMobile has only launched five satellites to date, with its second-generation satellites being significantly larger and untested in space. The analyst also noted potential delays in the planned launch of 45 to 60 satellites by the end of 2026.
Barclays identified several risks to its Underweight rating, including potential strong subscriber uptake reports from T-Mobile/Starlink’s direct-to-device services, a possible acquisition by a larger satellite player, and the stock’s elevated short interest of approximately 16% of outstanding shares, which could magnify any positive news.
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