AST SpaceMobile, Inc. (ASTS Quick QuoteASTS - Free Report) and Iridium Communications Inc. (IRDM Quick QuoteIRDM - Free Report) are two leading satellite communications services providers. AST SpaceMobile is building the world’s first and only global cellular broadband network in space, accessible directly by standard smartphones (4G-LTE/5G devices) for commercial and government use, leveraging its extensive Intellectual Property and patent portfolio. The SpaceMobile Service is provided by a constellation of high-powered, large phased-array satellites in low Earth orbit (LEO) using low-band and mid-band spectrums controlled by Mobile Network Operators (MNOs) in areas lacking terrestrial network coverage. 

Iridium offers dedicated commercial global voice and data communications services to both businesses and governments in the United States as well as globally. It operates one of the largest commercial constellations with a mesh architecture of 66 operational LEO satellites to route traffic using radio frequency crosslinks. The inimitable architecture provides impeccable performance by minimizing the need for ground infrastructure.

With a portfolio of satellite and communications network solutions, both AST SpaceMobile and Iridium have helped to eradicate dead zones by providing space-based connectivity to areas that lack broadband service. Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.

The Case for AST SpaceMobile

AST SpaceMobile has deployed its first five commercial satellites, dubbed Bluebird, in low Earth orbits, marking a key advancement in developing a space-based mobile network infrastructure. These satellites have the largest-ever commercial communications arrays spanning 693 square feet. They offer non-continuous service across the United States using more than 5,600 cells within the premium low-band spectrum. The company boasts a diverse portfolio of more than 3,650 patents and patent-pending claims worldwide for the direct-to-cell satellite ecosystem from space to Earth. 

The SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones. It is based on a novel technology that delivers broadband connectivity from space to unmodified mobile devices, providing a service to fill cellular coverage gaps in a differentiated approach compared to other space-based communication services. AST SpaceMobile has partnered with leading carriers such as AT&T Inc. (T Quick QuoteT - Free Report) and Verizon Communications Inc. (VZ Quick QuoteVZ - Free Report) to tap into a pre-existing pool of cell customers and avail funds to help build a worldwide satellite network. This has enhanced cellular coverage in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.

However, unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility, tariff imposition and geopolitical conflicts, are negatively impacting the company’s operations. These have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance. In addition, AST SpaceMobile faces severe competition from existing and new industry leaders like SpaceX’s Starlink and Globalstar, which are developing satellite communications technology using LEO constellations. In order to combat such competitive pressure, ASTS has to continuously customize its network offerings, enhance the cost-effectiveness of its products and services and boost the satellite data networks, which increases operating costs and reduces margins.

The Case for Iridium

Iridium’s mobile and satellite communication network leverages the advanced interlinked mesh architecture of 66 operational satellites to provide a global reach of its services across numerous territories. The installation of Starlink will allow the company to compete with KU and KA Band satellite operators. The company is likely to witness increasing adoption of its mid-band technology as well as benefit from the introduction of its new IoT transceiver in 2024. The Iridium Satellite Time and Location business is expected to generate more than $100 million in service revenue per year by 2030, offering a more reliable timing and location service to thwart spoofing and GPS jamming.

Iridium provides unrivaled mission-critical communications and maintenance services to all the military branches of the U.S. Department of Defense (“DoD”) with global coverage, low latency and mobility and security in areas where no terrestrial or wireless means of communications are available. The DoD remains focused on making continued investments in Iridium NEXT, Iridium Certus and other improved services. In the past two years, around a dozen products have been launched across aviation, maritime, land mobile and government sectors. Iridium expects these innovations, along with new consumer-focused applications, to drive broader adoption across industries to attract new users and drive higher IoT ARPU. 

However, adverse impacts on the industry owing to the combined pressures of newly imposed tariffs have affected margins. Increased competition from rival companies like Inmarsat, Globalstar and ORBCOMM has increased the need to rapidly innovate to stay ahead of the competition. At the same time, it has spurred a price war, as some of its competitors have been resorting to aggressive discounting to capture market share, squeezing its profitability. Iridium also remains vulnerable to security breaches and cyber-attacks across the aeronautics, energy and maritime industries, emergency services and the military.  

How Do Zacks Estimates Compare for ASTS & IRDM?

The Zacks Consensus Estimate for AST SpaceMobile’s 2025 sales implies year-over-year growth of 1314.6%, while that of EPS suggests a decline of 50%. The EPS estimates have been trending southward over the past 60 days.

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The Zacks Consensus Estimate for Iridium’s 2025 sales implies year-over-year growth of 5.4%, while that for EPS indicates an improvement of 9.6%. The EPS estimates have been trending northward over the past 60 days.

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Price Performance & Valuation of ASTS & IRDM

Over the past year, AST SpaceMobile has gained 268% compared with the industry’s growth of 35%. Iridium has gained 14.6% over the same period.

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Iridium looks more attractive than AST SpaceMobile from a valuation standpoint. Going by the price/sales ratio, Iridium’s shares currently trade at 3.57 forward sales, significantly lower than 68.13 for AST SpaceMobile.

Image Source: Zacks Investment Research

ASTS or IRDM: Which is a Better Pick?

AST SpaceMobile and Iridium carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Both companies expect their sales to improve in 2025. Iridium has shown steady revenue and EPS growth for years, while AST SpaceMobile has been facing a bumpy road. In terms of price performance, AST SpaceMobile has excelled compared with Iridium. However, with attractive valuation metrics and earnings growth expectations, Iridium is relatively better placed than AST SpaceMobile, although both appear to be on a level playing field in terms of Zacks Rank. Consequently, Iridium seems to be a better investment option at the moment.