Should I Buy AST Space Mobile (ASTS)? Finance YouTuber Analysis

The YouTuber sees AST Space Mobile as a high-risk, high-reward play, building satellites to beam cell signals directly to phones. He acknowledges its innovative technology and FCC clearance for many satellites but cautions that it's currently a 'vision' rather than a fully operational business. He anticipates a significant price drop to the low $80s due to its direct competition with Starlink and reliance on SpaceX for launches, making that a more appealing entry point.

“like to get the chance to go in at around the low 80s which I think is a lot closer to reality given how tight it is to SpaceX on both sides.”

The YouTuber advises avoiding ASTS due to its extremely high valuation, trading at a 592 price-to-sales ratio and a $50 billion market cap on only $60-80 million in annual revenue. He notes the company is unprofitable, relies on dilution and debt, and its stock price has run far ahead of its business fundamentals, increasing investor risk significantly.

“But for me, it always comes back to, okay, what is actually a fair price to pay for this business? Because a $50 billion market cap for a company doing anywhere between 60 to $80 million in revenue seems just too far out there, man.”

The YouTuber maintains a short position on AST SpaceMobile, citing concerns about its near-zero revenue, significant cash burn, and the short useful life of its satellites which require rapid monetization. He emphasizes the new formidable competition from SpaceX, which has its own rockets and is rapidly deploying its Starlink direct-to-cell network, making AST SpaceMobile's valuation of $11.4 billion for an unproven business highly questionable.

“This is the reason that I have not been high on a space mobile. Actually have a short position on the stock via the asymmetric portfolio.”

The analyst suggests avoiding AST SpaceMobile due to concerns that Apple's direct deal with Globalstar could undermine AST SpaceMobile's business model, which relies on partnerships with telecom companies. He also expresses skepticism about the long-term profitability of satellite communication companies due to high competition and significant infrastructure costs, similar to past telecommunications companies.

“I think that's ultimately what's going to keep keep me from investing in this space But as a shareholder of a company like Verizon this is ultimately really concerning that companies handset makers are just going to potentially go around a company like Verizon this potentially undermines Verizon's value to customers and to Partners like apple.”

The YouTuber advises avoiding AST SpaceMobile due to its lack of current revenue and significant losses, making its financial sustainability questionable despite positive strategic developments like commercial agreements with Verizon and AT&T and Apple's iOS 18 satellite features. He notes the difficulty in assessing the return on invested capital and the potential for competition, suggesting the stock's current run is driven by hype rather than proven profitability.

“this is what's ultimately keeping me out of the stock right now is that we just simply don't know what the upside is there's no Revenue right now coming into the company”

Travis Hoium expresses hesitation about investing in AST SpaceMobile despite its potential, citing its current lack of revenue and significant cash burn while holding a $2 billion market cap. He acknowledges the promising technology and recent commercial agreements with AT&T and Verizon but emphasizes the very high risk due to unproven financials and the uncertainty of long-term profitability.

“this is a company that doesn't yet have any revenue and yet has a $2 billion market cap and that's where I'm really hesitant as an investor this is a very very high-risk investment and just not one I'm ready to make yet”