After AST SpaceMobile (AST) revealed new, encouraging deals with a number of huge telecom firms and British bank Barclays released an upbeat assessment on the company, I remain very bullish on the outlook of ASTS stock.
What’s more, the company still expects to begin providing cellular broadband service using its satellites beginning in 2026, and its valuation is quite low in light of the huge opportunity that it has.
Given all of this information, I continue to believe that long-term growth investors should consider purchasing the stock.
As I’ve explained in previous columns, “AST has developed a space-based cellular broadband network that can provide coverage to everyday consumer smartphones.”
New, Impressive Deals
Last month, AST disclosed that it had reached a “definitive” deal to provide its technology to Verizon’s (VZ) customers beginning in 2026. As PC Magazine noted, the announcement indicated that “Verizon is going all in on AST,” despite previous speculation that the telecom giant would look to partner with SpaceX instead of AST.
Also encouragingly, AST noted that, in partnership with Verizon, it had already “successfully completed direct voice and video calls, as well as two-way RCS messaging, between standard, unmodified smartphones and (an AST) BlueBird satellite in space.”
Also in October, AST and stc group, described as a “leading digital enabler in the Middle East and North Africa (MENA) region,” unveiled a 10- year commercial agreement to enable direct-to-device satellite mobile connectivity across Saudi Arabia and key regional markets.”
Showing stc’s commitment to the deal, the firm agreed to provide AST with “a prepayment of $175 million for future services and made a significant long-term commercial revenue commitment” to AST. Of course, the $175 million payment will significantly bolster AST’s balance sheet as it rolls out its satellites. Further, the agreement, which represents AST’s first foray into the Middle East/North Africa area, could lead to the company making similar deals with other firms in the region.
That’s because word of stc’s agreement will likely spread among the other telecom companies in the area, and stc’s competitors may also want to offer AST’s technology to their customers so they will not be at a competitive disadvantage to stc.
Finally, showing that AST’s huge European partner, Vodafone, is moving ahead with utilizing AST’s technology, ASTS and the telecom giant disclosed on November 7 that they would build their “main Satellite Operations Centre” in Germany. The facility’s task will be to “allocate and map satellite connectivity used by” SatCo, a joint venture formed by AST and Vodafone.
Additionally, in very encouraging news for ASTS stock, the companies announced that telecom companies “in 21 European Union (EU) member states and other European countries have expressed interest in adopting (AST’s) service, with commercial launch planned to commence from 2026.” And the centre will “support emergency services and disaster relief agencies,” AST and Vodafone stated. For the owners of ASTS stock, that’s very good news, since governments tend to pay significantly more than consumers for services.
Taken together, these agreements show that huge telecom companies continue to be very confident in AST’s technology and that the firm still has the opportunity to generate tremendous amounts of revenue over the long term.
Barclays’ Report and AST’s Long-Term Revenue Potential
In a report released on October 1, Barclays pointed out that Starlink, in partnership with T-Mobile (TMUS), had unveiled “a text-only (satellite-based) service for $10 per month.” But AST’s service will enable “call, text and broadband, “so AST’s offering could be more expensive,” the British bank stated.
AST’s CEO, Abel Avellan, noted on the company’s Q3 earnings call that the firm had already reached “agreements and understanding(s) with over 50 (telecom companies) with nearly 3 billion subscribers globally.”
If AST’s partners charge $20 per month for the service and 100 million of their customers (or slightly above 3% of those eligible for it) adopt it, the service would generate total annual revenue of $24 billion. If AST keeps two-thirds of that revenue, its annual take would come in at $16 billion. The market capitalization of ASTS stock is now only $16.5 billion, representing slightly above 1 time its potential revenue from consumers, based on my assumptions. That’s a very low price-sales ratio and we haven’t even talked about the company’s potential revenue from multiple governments which could provide the technology to both their militaries and their emergency personnel.
Indeed, AST is already working with the Pentagon, while a number of European countries appear set to utilize its technology for civilian emergencies.
*This article is intended to be informational only; it is not financial advice.
