At first glance, one of the newer price targets for AST SpaceMobile(NASDAQ: ASTS) stock looks like a typo. After all, $19 per share is more than eight times higher than the current share price.
Yet it's no mistake. One analyst believes so much in the company's future that he's anticipating such a leap. What's giving him such confidence?
A highly speculative stock
Just after AST SpaceMobile reported its latest set of quarterly earnings (or lack thereof), Deutsche Bank's Bryan Kraft set a new price target for the shares. Interestingly, he actually lowered that target, from a relatively lofty $23 to that $19 per share while maintaining his buy recommendation.
AST isn't one of the more famous names in the telecom sector, but it's undeniably one of the more adventurous. The company aims to set up a broadband cellular network in space, beaming down service to customers around the globe.
To understate the case greatly, that's easier said than done. And AST is currently struggling with the "get it done" part. Concurrent with that quarterly report it announced the latest in a series of delays in launching its first five satellites into orbit. This was originally supposed to occur last year.
Revenue sources needed
AST did not post any revenue at all in 2023. Operating expenses rose considerably, resulting in a notably deeper net loss compared to the 2022 tally ($87.6 million vs. $31.7 million). As of last December, it had less than $86 million in cash and equivalents in its coffers, so getting those birds in the air seems imperative.
Kraft is encouraged by the company's recent successes, which include a rather vaguely described deal with an unidentified U.S. government contractor that should bring in at least some badly needed revenue.
AST is about as speculative a stock play as it's possible to get. Personally, I have a weak spot for businesses with soaring ambitions, and you can't get more soaring than this. At this cheap share price, the potential for serious upside is definitely there if the company can meet its lofty goals -- though that's a big "if."
Should you invest $1,000 in AST SpaceMobile right now?
Before you buy stock in AST SpaceMobile, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AST SpaceMobile wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 4, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
