AST SpaceMobile (ASTS +0.32%) is one of the most aggressively valued stocks on the market. The company trades at a $39 billion market cap on just $54.3 million in trailing-12-month (TTM) revenue, a price-to-sales (P/S) ratio of over 382.
Today’s Change
(0.32%) $0.28
Current Price
$89.76
Key Data Points
Market Cap
$26B
Day’s Range
$86.55 – $91.87
52wk Range
$18.22 – $129.89
Volume
11M
Avg Vol
16M
Gross Margin
-14399.31%
Why are investors paying such a premium for AST stock?
If the company can deliver on its promise, the payoff could be enormous. AST is building a satellite constellation designed to deliver cellular broadband directly to standard smartphones. Its partners include AT&T, Verizon, Vodafone, and now TELUS — carriers collectively serving billions of subscribers. If commercial service activates at scale, recurring revenue could reach tens of billions annually. It’s also recently landed a defense contract, adding another potential revenue stream.
Image source: Getty Images.
Is AST SpaceMobile worth the risk?
But that’s a lot of “ifs.” AST has a handful of satellites in orbit and plans to launch dozens more by year end, but it still has a long way to go, and there is significant execution risk.
At this valuation, you’re paying a premium for a future that’s far from guaranteed. Still, there’s enough of an opportunity here for investors with a very high risk tolerance.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends TELUS, Verizon Communications, and Vodafone Group Public. The Motley Fool has a disclosure policy.
