SpaceX Rival Secures Key Contract, But Posts Big Earnings Miss
Thursday, Nov 14, 2024 5:56 pm ET
3min read AST SpaceMobile, a SpaceX rival and partner, posted a major miss for its quarterly results late Thursday, yet secured a key contract to expand its space-based telecommunications network. The company reported a loss of $1.10 per share, widening from a loss of 23 cents per share last year, while revenue came in at $1.1 million, missing FactSet estimates of $1.8 million. However, AST SpaceMobile announced new launch service agreements that will enable continuous space-based cellular broadband coverage across key global markets, including the U.S., Europe, Japan, and services for the U.S. government. The next block of about 60 satellites will launch into low orbit from the Cape Canaveral Florida Space Force Station in 2025 and 2026, utilizing existing launch vehicles and Blue Origin's New Glenn rocket.
AST SpaceMobile's stock fell more than 14% in after-hours trading, poised to cut below its 50-day moving average and retest early November lows. Shares retreated 4.4% Thursday, but jumped about 15% Wednesday after Rocket Lab's results. AST SpaceMobile ended Thursday up more than 343% so far this year.
While the earnings miss is concerning, the key contract signals a promising future for AST SpaceMobile. The company's ability to connect everyday smartphones to orbiting satellites differentiates it from SpaceX's Starlink, which relies on fixed terminals. This unique selling proposition could drive long-term growth, as smartphones are ubiquitous, and AST SpaceMobile's network will initially target key markets like the U.S., Europe, Japan, and the U.S. government.
As AST SpaceMobile continues to expand its constellation and secure more launch agreements, its partnership with SpaceX will remain a key driver of its financial performance. Leveraging SpaceX's proven launch services, AST SpaceMobile can reduce capital expenditure and accelerate its constellation deployment, potentially driving revenue growth. Moreover, SpaceX's expertise in satellite technology and launch services can help AST SpaceMobile optimize its satellite design and operations, further enhancing its earnings potential.
In conclusion, AST SpaceMobile's earnings miss is a setback, but the key contract indicates a promising future. The company's unique selling proposition, partnership with SpaceX, and strategic launch agreements position it well for long-term growth. As the company continues to deploy its constellation and secure additional launch service agreements, investors should monitor its progress and consider its potential as a long-term investment in the burgeoning space-based telecommunications market.
AST SpaceMobile's stock fell more than 14% in after-hours trading, poised to cut below its 50-day moving average and retest early November lows. Shares retreated 4.4% Thursday, but jumped about 15% Wednesday after Rocket Lab's results. AST SpaceMobile ended Thursday up more than 343% so far this year.
While the earnings miss is concerning, the key contract signals a promising future for AST SpaceMobile. The company's ability to connect everyday smartphones to orbiting satellites differentiates it from SpaceX's Starlink, which relies on fixed terminals. This unique selling proposition could drive long-term growth, as smartphones are ubiquitous, and AST SpaceMobile's network will initially target key markets like the U.S., Europe, Japan, and the U.S. government.
As AST SpaceMobile continues to expand its constellation and secure more launch agreements, its partnership with SpaceX will remain a key driver of its financial performance. Leveraging SpaceX's proven launch services, AST SpaceMobile can reduce capital expenditure and accelerate its constellation deployment, potentially driving revenue growth. Moreover, SpaceX's expertise in satellite technology and launch services can help AST SpaceMobile optimize its satellite design and operations, further enhancing its earnings potential.
In conclusion, AST SpaceMobile's earnings miss is a setback, but the key contract indicates a promising future. The company's unique selling proposition, partnership with SpaceX, and strategic launch agreements position it well for long-term growth. As the company continues to deploy its constellation and secure additional launch service agreements, investors should monitor its progress and consider its potential as a long-term investment in the burgeoning space-based telecommunications market.
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