Key Takeaways
- Mike Crawford from B. Riley raised his rating on ASTS to Buy from Hold while maintaining an $85 price target.
- Shares of AST SpaceMobile reached $133.86 in May before plummeting over 50% in subsequent months.
- A 17% single-day decline occurred Thursday following the company’s announcement of a $1 billion convertible bond offering.
- Analyst buy ratings on ASTS stand at just 21%, significantly trailing the S&P 500’s typical 55–60% buy rating range.
- Concerns about SpaceX’s competitive position and limited orbital access continue to weigh on investor sentiment.
Shares of AST SpaceMobile have been trading in the $55–$57 range, representing a dramatic decline of more than half from the stock’s May high of $133.86. Following this substantial retreat, at least one Wall Street analyst believes the correction has created an attractive entry point.
Mike Crawford at B. Riley shifted his stance to Buy from Hold on Friday, reiterating his $85 price target for the shares. Crawford had previously lowered his recommendation in January when ASTS was changing hands near the $100 level. With the stock now trading approximately 50% lower, he believes the valuation presents improved risk/reward dynamics.
On Friday, ASTS shares edged up roughly 0.7% to $55.37, even as broader market indices retreated — the S&P 500 declined 1.3% and the Dow Jones fell 0.8%.
Notably, the upgrade maintained the existing price target, suggesting Crawford’s fundamental assessment of the business remains stable while the stock’s lower price makes it more attractive.
Convertible Bond Announcement Triggers Investor Exodus
The most dramatic single-session decline occurred Thursday, with ASTS plunging 17% after revealing plans for a $1 billion private placement of convertible senior notes. These securities feature an initial conversion price slightly below $80 per share — representing approximately a 20% premium to the pre-announcement trading level.
Convertible debt instruments pose dilution risks for current shareholders since they can ultimately be exchanged for equity. Additionally, convertible bond investors frequently employ short-selling strategies on the underlying stock to hedge their positions, creating additional downward price pressure.
Detractors pointed out that AST shares were commanding prices above $130 just weeks earlier in late May. Executing this capital raise at current levels, with a substantially lower conversion threshold, translates to greater shareholder dilution compared to a deal struck at higher valuations.
The company indicated that funds raised will support expansion initiatives and help “secure additional access to orbit” for its satellite-based cellular broadband infrastructure.
The SpaceX Challenge Looms Large
While the convertible bond offering dominated recent headlines, competitive pressure from SpaceX represents a potentially more significant long-term challenge. Starlink has already established an extensive operational satellite constellation and maintains substantial control over orbital access — precisely what AST needs to expand.
SpaceX shares dipped below their $135 IPO price for the first time on Thursday, reflecting broader cooling sentiment toward space sector investments.
Analyst sentiment has deteriorated notably over the past year. Twelve months ago, 67% of analysts covering ASTS recommended buying the stock. That percentage has collapsed to merely 21%, far below the 55–60% buy rating prevalence typical among S&P 500 constituents. The consensus analyst price target hovers around $87, closely aligned with Crawford’s $85 projection.
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