AST SpaceMobile, Inc. is set to announce ASTS reports third-quarter 2024 earnings on Nov. 14. For the third quarter, the Zacks Consensus Estimate for revenue is pegged at $2 million. The Zacks Consensus Estimate for third-quarter earnings was pegged at a loss of 18 cents per share, suggesting a smaller loss than the loss of 23 cents per share in the same quarter a year ago. ASTS earnings estimates remained unchanged with a loss of $1.03 per share for 2024 and a loss of 51 cents per share for 2025 over the past 60 days.
Get the latest EPS estimates and surprises in the Zacks Earnings Calendar.
ASTS Estimation Trend
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Earnings surprise history
The Texas-based organization delivered an earnings surprise of 26.32% in the last reported quarter. It delivered a surprise Q4 earnings of negative 9.69%.
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Profits whispers
Our proven model does not conclusively predict ASTS’ third-quarter earnings outperformance. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. This is not the case here. You can discover the best stocks to buy or sell before they are reported using the Earnings ESP filter.
The company has an Earnings ESP of 0.00% and is currently a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors that shape upcoming results
During the quarter, ASTS announced the successful orbital launch of its first five commercial satellites, BlueBirds, from Florida. Equipped with the largest commercial communications arrays, the system effectively supports bandwidth up to 40 MHz, facilitating a maximum data transfer speed of 120 Mbps. With more than 5,600 coverage cells in the United States, the company aims to provide uninterrupted cellular broadband service across the country. The service is also available in select markets around the world.
This represents significant progress towards the company’s vision of creating a satellite cellular network, expanding connectivity to rural areas and eliminating the need for expensive terrestrial infrastructure.
Its business communications technologies are gaining good traction in the government sector for mission-critical applications. These factors are likely to have a positive impact on third-quarter earnings.
Price performance
Over the past year, ASTS has gained 519% compared to industry growth of 51.5%. It has also outperformed its peers, such as Aviat Networks, Inc. AVNW and Comtech Tecommunication Corp. CMTL during this period.
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Main evaluation scale
From a valuation perspective, ASTS appears to be trading at a premium to the industry and well above its average. Based on a 12-month forward sales price, the company’s shares are currently trading at 76.09 forward sales, which is higher than the industry’s 5.67 and the stock average of 26.09.
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Investment considerations
AST SpaceMobile has made steady progress toward its goal of developing a wide-area cellular network that works seamlessly with smartphones for commercial and government use. Strategic investments from Verizon, AT&T, Vodafone and Google are driving its research innovation initiatives. The company has also received several contracts from the US government.
The company cooperates closely with mobile network operators (MNOs) around the world. It currently has agreements with 45 mobile network operators globally, with a total subscriber base of 2.8 billion. The company boasts a comprehensive and diverse intellectual property portfolio that includes 3,400 patents and pending patent claims, giving it a significant competitive advantage. A strong focus on research and innovation is a plus.
However, the development of these advanced technologies, satellites and ASIC chip designs significantly increases R&D costs and overall operating expenses. Despite efforts to improve spending, rising costs are putting pressure on profitability. Additionally, SpaceX is partnering with T-Mobile to provide direct-to-cell services in the United States. This partnership could bring significant competition to AST SpaceMobile.
End note
With a Zacks Rank of #3, ASTS appears to be halfway along, and new investors may be better off if they trade cautiously. The company is currently trading at a premium valuation scale, and investors should consider waiting for a more favorable entry point to take advantage of its strong long-term fundamentals.
However, single quarter results are not very vital for long-term stakeholders. Investors who already own the stock may consider holding it, as its strong intellectual property and patent portfolio and extensive partner network with mobile network operators around the world bode well for long-term growth.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
