TLDR
- AST SpaceMobile shares dropped 12.1% to $85.73 on Wednesday with above-average trading volume
- The company missed earnings estimates by $0.27 per share and revenue expectations by $7.3 million
- Four major analysts downgraded the stock, resulting in a consensus ‘Reduce’ rating with a $45.66 price target
- Insiders sold over $164 million worth of shares in the past 90 days, including large sales by the CTO and CAO
- Despite recent losses, the stock has gained 281% over the past year
AST SpaceMobile shares dropped 12.1% on Wednesday, closing at $85.73 as investors reacted to a string of analyst downgrades and disappointing quarterly results. Trading volume reached 24.2 million shares, roughly 18% above the average daily volume.
The satellite communications company now carries a consensus rating of “Reduce” from Wall Street analysts, with an average price target of $45.66. That target suggests analysts expect the stock could fall nearly 47% from current levels.
Four major firms have downgraded the stock in recent months. Barclays moved AST SpaceMobile from “overweight” to “underweight” in October, setting a $60 price target. Scotiabank downgraded the stock from “sector perform” to “sector underperform” this week with a $45.60 target.
UBS Group cut its rating from “buy” to “neutral” in September, lowering its price target from $62 to $43. Zacks Research also downgraded the company from “hold” to “strong sell” in late October.
Earnings Miss Expectations by Wide Margin
AST SpaceMobile reported quarterly earnings on November 10 that fell short on both revenue and profit measures. The company posted a loss of $0.45 per share, missing analyst estimates of $0.18 by 150%.
Revenue came in at $14.74 million for the quarter, well below the $22.04 million analysts had expected. The company reported a negative net margin of 1,639.59% and a negative return on equity of 27.76%.
Despite the miss, revenue showed growth of 1,236.4% compared to the same quarter last year. Analysts predict the company will post a loss of $0.40 per share for the full fiscal year.
Executives Sell Shares as Stock Volatility Continues
Insider selling has accelerated at the company in recent months. Chief Technology Officer Huiwen Yao sold 40,000 shares on December 5 at an average price of $73.52, reducing his holdings by 89.39%.
Chief Accounting Officer Maya Bernal also sold 6,000 shares the same day at $73.76 per share. Over the past 90 days, insiders have sold more than 2.3 million shares worth over $164 million.
Insiders still control roughly 30.9% of the company’s outstanding stock. The company maintains a market capitalization of $31.46 billion and a beta of 2.70, indicating high volatility compared to the broader market.
AST SpaceMobile develops a space-based cellular broadband network designed to connect standard mobile phones directly to satellites. The company operates low-Earth-orbit satellites equipped with phased-array antennas to provide mobile broadband without specialized equipment.
The stock has posted gains of 281% over the past year despite recent losses. Institutional investors hold approximately 60.95% of the company’s shares.
AST SpaceMobile maintains a debt-to-equity ratio of 0.43, a current ratio of 9.56, and a quick ratio of 9.48. The stock’s 50-day moving average stands at $69.33, while the 200-day moving average is $60.03.
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