AST SpaceMobile (ASTS) has drawn renewed scrutiny after B. Riley downgraded the stock to Neutral from Buy on October 2, slashing its price target to $65 from $85.
Analyst Mike Crawford cited delayed launches, rising constellation costs, and growing competition as the primary reasons for the more cautious stance on the satellite connectivity company.
Crawford pointed specifically to the Equatys joint venture between Viasat and Space42 as a competitive threat that adds pressure to AST’s long-term pricing power assumptions.
Crawford said shares fairly reflect what is currently known about the business until subscriber uptake and plan pricing data become available to investors.
His $65 target sits below the Street mean of approximately $78, while shares closed up 2.47% at $58.45 on the day of the downgrade, still trailing the September 30 close of $58.86.
None of AST’s revenue currently depends on phone plans, with Q2 2026 revenue of $31.52 million driven by gateway deliveries and U.S. government milestones as commercial service has not yet launched.
President Scott Wisniewski reiterated the company’s goal of approaching $1 billion in revenue during the first year of commercial service, which management expects to begin in 2027.
Wisniewski cited a “really strong opportunity in government that could contribute to probably as much as half of that” revenue figure, alongside continued infrastructure contributions.
AST also announced three awards with a funded near-term value of over $100 million across 2026 and 2027, though Wisniewski described current awards as initial phases the government wants AST to perform on before scaling up.
In Japan, a Rakuten and AST joint venture won preliminary selection for the J-LEO project, with a total expected value of up to approximately $1 billion, pending government approvals and final agreements.
CEO Abel Avellan said the funding represents “roughly half on the investment on those satellites in capital that is non-dilutive and non-debt,” referring specifically to the Japan-flagged satellites included in the project.
CFO Andy Johnson stated on the August 10 earnings call, “We’ve been consistent now for several quarters that we are falling between $21 million and $23 million per satellite,” a range that includes launch costs.
BlueBirds 14, 15, and 16 have shipped to Cape Canaveral for an upcoming launch, joining 13 satellites already in orbit as of the Q2 report, making launch timing the hardest near-term variable.
ASTS currently trades at approximately 53x NTM EV/revenue, a steep premium compared with around 25x for SpaceX (SPCX), 34x for Globalstar (GSAT), and 7x for Iridium (IRDM).
A pending securities class action covering purchases from March 4, 2025, to July 15, 2026, alleges the company overstated its competitive position, with unproven allegations and a lead plaintiff deadline of November 13, 2026.
TIKR’s fiscal 2027 revenue consensus has fallen roughly 15% since June 30, even as analyst coverage expanded from 9 to 11 analysts, reflecting broader uncertainty around the commercial launch timeline.
A valuation model’s mid-case scenario projects a target price of approximately $184 by December 31, 2030, from the $58.45 entry price, representing a potential total return of around 215% and an annualized IRR of roughly 31% per year.
Street estimates show EBITDA turning positive at around $110 million in 2027, while EBIT and net income are expected to remain negative that same year, underscoring how much execution still lies ahead.
The Q3 report, expected in November but not yet confirmed by the company, represents the next major checkpoint, with consensus calling for approximately $47 million in revenue.
A strong print near that figure, paired with new government award disclosures, would support the government-led growth path, while a miss with no new contracts would reinforce B. Riley’s cautious stance ahead of 2027 commercial launch.
