Is AST Spacemobile Stock a Smart Buy Before Q2 Earnings Release?

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Earnings Surprise History

The company delivered a negative four-quarter earnings surprise of 124.3%, on average. In the last reported quarter, the company delivered a negative earnings surprise of 186.96%.

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Earnings Whispers

Our proven model does not conclusively predict an earnings beat for ASTS this time around. 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 uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ASTS currently has an ESP of -1.56% with a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factor Shaping Upcoming Result

During the second quarter, AST SpaceMobile successfully launched BlueBird satellites 8, 9 and 10 into low Earth orbit aboard a SpaceX Falcon 9 rocket. The satellites feature approximately 2,400-square-foot communications arrays and are expected to nearly double the peak data speeds delivered by the company's initial Block 1 BlueBird satellites. Following the successful launch, ASTS announced that BlueBirds 11, 12 and 13 are targeted for launch during the first half of August. The developments highlight that the company is well on track in developing its direct-to-device cellular broadband network infrastructure.

In the quarter under review, ASTS secured approval from the U.S. Federal Communications Commission (FCC) to commercially offer its SpaceMobile Service across the United States. The authorization is an important step towards the commercialization of its services in the country. The authorization allows the company to operate a constellation of up to 248 satellites delivering direct-to-device cellular broadband using premium low-band spectrum in partnership with AT&T and Verizon. Such developments bode well for sustainable growth.

However, competition in satellite communications remains intense. Space Exploration Technologies Corp. SPCX, which recently completed its IPO, is expanding the Starlink network. The company is collaborating with T-Mobile to expand its direct-to-device services. At the same time, Globalstar, Inc. GSAT, a leading player in satellite voice and data services, stands to benefit from Amazon's planned acquisition. These factors are expected to intensify competition in the satellite communications market going forward.

Price Performance

Over the past year, ASTS has gained 20.8% compared to the industry’s growth of 28.2%. However, the company has outperformed peers like SpaceX but underperformed Globalstar. GSAT has surged 237.1%. SPCX has declined 15.1% since its IPO.

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Key Valuation Metric of ASTS

From a valuation standpoint, ASTS is currently trading at a premium compared to the industry. Going by the price/sales ratio, the company’s shares currently trade at 51.12 forward sales, higher than 4.71 for the industry.

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Investment Consideration

AST SpaceMobile has accelerated the rollout of its BlueBird constellation. This steady deployment improves network coverage and strengthens commercial readiness. The company continues to target roughly 45 satellites in orbit by the end of 2026, with launches expected every one to two months.

The company continues to benefit from its highly vertically integrated manufacturing model. This gives the company greater control over production, quality and supply chain management. AST SpaceMobile has established one of the industry's largest partner ecosystems, with agreements covering nearly 60 mobile network operators representing more than three billion subscribers. Collaborations with AT&T, Verizon, Vodafone, Rakuten, Bell Canada and TELUS broaden its footprint and align the service with existing operator spectrum and network cores.

Besides telecom operators, AST SpaceMobile continues to expand its presence in government programs. The company secured additional U.S. government awards during the first quarter, while management expects both government programs and mobile network operator agreements to drive revenue growth throughout 2026.

However, building a global direct-to-device satellite network requires substantial capital investment across satellite manufacturing, launches, gateway infrastructure and spectrum integration. In large-scale operations such as ASTS, execution risk remains a major concern for investors. While recent launches have been successful, the issue during the BlueBird 7 launch highlights the operational risks. Competition in direct-to-device satellite connectivity is intensifying as players such as SpaceX's Starlink, Globalstar and Viasat continue expanding their satellite capabilities.

SpaceX’s Starlink is ahead of ASTS in terms of commercial deployment. The company already offers messaging solutions and is developing voice communication. Its partner base includes T-Mobile, Rogers, Virgin Media O2 and others. It is worth noting that ASTS has a broader partner ecosystem and has developed a strong foundation in space-based cellular networks.

End Note

ASTS SpaceMobile is set to gain from gateway hardware sales and U.S. government contracts in the second quarter. Strong satellite deployment momentum and an expanding partner base are positive factors. Regulatory approvals reduce commercialization risk. However, it is to be noted that although ASTS has demonstrated technology success, large-scale consumer adoption, pricing models, carrier monetization and long-term economics are still unproven. Growing competition in the satcom space is a concern. With a Zacks Rank #3, ASTS appears to be treading in the middle of the road, and new investors could be better off if they trade with caution.

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This article originally published on Zacks Investment Research (zacks.com).

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