AST SpaceMobile's Stock Is Down After Another Successful Launch: Time to Buy The Dip?
Key Points
AST successfully launched its eighth, ninth, and tenth BlueBird satellites.
It’s already producing dozens of additional satellites.
It could still be reasonably valued relative to its growth potential.
AST SpaceMobile (NASDAQ: ASTS), a developer of low-earth-orbit satellites for terrestrial cellular connections, launched its BlueBirds 8, 9, and 10 satellites on June 17. Those three satellites marked AST's eighth, ninth, and tenth commercial satellite launches.
AST also stated that BlueBirds 11, 12, and 13 were in "final preparations" for their shipments to Cape Canaveral. It's also in the process of producing its remaining satellites through BlueBird 37.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
It plans to have 45 to 60 satellites in orbit by the end of 2026, and to expand that constellation to as many as 248 satellites over the next few years.
Image source: Getty Images.
AST's progress is encouraging, but its stock still dipped after the news and remains 35% below its all-time high from a month ago. Is it the right time to buy the dip?
Why is AST SpaceMobile's constellation expanding?
At roughly 2,400 square feet, AST's BlueBird satellites are the largest communications arrays deployed into low Earth orbit. They're more than twice the size of SpaceX's (NASDAQ: SPCX) biggest Starlink satellites.
Unlike Starlink, which offers its own first-party satellite internet services, AST helps telecom giants like AT&T and Verizon extend their wireless networks to rural areas that terrestrial towers can't reach.
AST also processes its cellular data on the ground using its Radio Access Network (RAN) software, while Starlink processes that data in its satellites. Therefore, AST can upgrade to new wireless technologies (such as 6G) without completely replacing its satellites, unlike Starlink.
How fast will AST grow over the next few years?
From 2025 to 2028, analysts expect AST's revenue to surge from $71 million in 2025 to $1.88 billion in 2028. They also expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive in 2027 and nearly quadruple to $1.39 billion in 2028.
With an enterprise value of $23.1 billion, AST might seem expensive at 136 times this year's sales. But at 13 times its projected 2028 sales, it could be reasonably valued relative to its long-term growth potential. According to Grand View Research, the global LEO internet and satellite market could expand at a robust 14% CAGR from 2025 to 2033.
SpaceX's IPO sucked the oxygen out of the space sector and drew investors away from smaller space stocks like AST SpaceMobile. But now that SpaceX's stock has pulled back after its big post-IPO rally, it might be smart to revisit AST as a long-term play on LEO cellular satellites.
Leo Sun has positions in Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.