Is AST SpaceMobile (ASTS) Still a Buy After Its 254% 2025 Surge?

The meteoric 254% surge in AST SpaceMobile (ASTS) in 2025 has thrust the satellite-to-smartphone connectivity pioneer into the spotlight, but whether it remains a compelling investment hinges on two critical factors: valuation divergence and execution risk. With a Price-to-Sales (P/S) ratio of 1,435x and an EV/EBITDA ratio of -93.71, ASTS's financial metrics defy conventional logic, raising questions about whether its lofty valuation is justified by fundamentals or speculative optimism.

Valuation Divergence: A Tale of Two Narratives

ASTS's valuation has diverged sharply from industry benchmarks, reflecting a market that is pricing in future potential rather than current performance. According to Simply Wall Street, the company's P/S ratio of 1,435x is astronomically higher than the peer average of 1.7x, while its Price-to-Book (P/B) ratio of 22.1x dwarfs the industry average of 1.8x. These metrics underscore a stock that is trading at a premium inconsistent with its revenue base or asset value.

The EV/EBITDA ratio of -93.71 further highlights the disconnect. With negative EBITDA of -$371.04 million and an enterprise value of $34.77 billion, ASTS is valued as if its losses are temporary hiccups rather than structural challenges. A discounted cash flow model estimates an intrinsic value of $194.42 per share, implying the stock is undervalued by 61% despite its current price of $79.05. This paradox-where a deeply unprofitable company is deemed undervalued-reflects investor confidence in ASTS's long-term vision but also exposes the fragility of its current valuation.

Execution Risk: Can ASTS Deliver on Its Promises?

The sustainability of ASTS's valuation depends on its ability to execute its ambitious plans. The company is investing heavily in a satellite constellation to enable direct-to-smartphone connectivity, a market it aims to dominate. However, its trailing twelve-month operating margin of -5,315% and a cash burn rate of $371 million annually raise concerns about its capacity to transition from deployment to profitability.

While ASTS has secured $1 billion in contracted revenue from partners like Verizon and stc Group, these commitments are not a guarantee of near-term profitability. The company must successfully launch and scale its satellite network, secure regulatory approvals, and convince consumers to adopt a new technology. Any delays or technical setbacks could erode investor confidence, as the market has little tolerance for missed milestones in high-growth tech stocks.

Balancing Optimism and Caution

ASTS's valuation divergence is a double-edged sword. On one hand, its DCF-derived intrinsic value suggests the market is undervaluing its long-term potential. On the other, its financials reveal a company that is far from self-sustaining. The key question is whether ASTS can generate revenue growth sufficient to justify its multiples. If the company achieves its target of $1 billion in annual revenue and begins to narrow its losses, the current valuation could appear prescient. Conversely, if execution falters, the stock's sharp re-rating could reverse just as quickly.

For investors, the decision to hold or buy ASTS hinges on risk tolerance. The stock offers asymmetric upside if the company succeeds but carries significant downside if it fails to meet expectations. Given the high-stakes nature of its mission, ASTS remains a speculative bet rather than a conventional buy.