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What Should be Your Stance on ASTS Stock Ahead of Q1 Earnings?
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Key Takeaways
AST SpaceMobile won U.S. defense contracts, expanding beyond commercial satellite services.
ASTS partnered with telecom firms like TELUS to expand satellite-based mobile connectivity.
ASTS faces pressure from Starlink, Globalstar and Viasat amid premium valuation concerns.
AST SpaceMobile (ASTS - Free Report) is scheduled to report first-quarter 2026 earnings on May 11, 2026, after market closes. The Zacks Consensus Estimate for revenues and earnings is pegged at $38.24 million and a loss of 23 cents per share, respectively. Over the past 60 days, the earnings estimate for ASTS for fiscal 2026 has increased 1%.
ASTS Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The company delivered a negative four-quarter earnings surprise of 81.97%, on average. In the last reported quarter, the company delivered a negative earnings surprise of 44.44%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts a likely 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 exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
During the quarter, ASTS announced that it had been selected as a prime contractor under the U.S. Missile Defense Agency’s SHIELD program. This repositions the company from a commercial satellite-to-phone connectivity to a major player in the U.S. defense and national security ecosystem. AST’s satellite architecture can have potential use cases in military communications, command-and-control systems, surveillance and other applications. A 95% vertical integration and manufacturing process under U.S.-controlled headquarters in Texas makes ASTS a secure and trustworthy partner for the U.S. defense industry.
In the quarter under review, the company secured a $30 million contract from the United States Space Development Agency (SDA) for the Europa Track 2 Commercial Solutions program. The company will integrate its commercial satellite infrastructure with existing tactical military radios to support direct satellite connectivity between government end devices. DoD aims to develop a scalable, resilient space-based defense communication architecture. This presents a solid growth opportunity for ASTS. These factors are expected to be reflected in the upcoming quarterly results.
However, the direct-to-device satellite market is becoming crowded. The company faces competition from existing and new industry leaders like SpaceX’s Starlink and Globalstar, Inc. (GSAT - Free Report) , which are developing satellite communications technology using LEO constellations. Viasat, Inc. (VSAT - Free Report) is also expanding into space-based connectivity and collaborating with major telecom operators. Such trends can impose a challenge to ASTS’ satcom growth initiatives.
Price Performance
Over the past year, ASTS has gained 152.2% compared to the industry’s growth of 73.2%. However, it has underperformed peers like ViaSat and Globalstar over this period. Viasat has increased 606.5%, while Globalstar has increased 307.1% during this period.
Image Source: Zacks Investment Research
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 65.57 forward sales, higher than 5.68 for the industry.
Image Source: Zacks Investment Research
Investment Considerations
ASTS is building the world’s first 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. Several major telecom operators worldwide are collaborating with ASTS to expand their coverage in rural and remote regions.
There are initiatives from several governments worldwide supporting this trend, as it will bridge the digital divide. Network operators such as AT&T, Verizon, Vodafone, Rakuten, Google, American Tower, Bell and stc Group and others aim to leverage ASTS capabilities to increase accessibility of high-speed 4G and 5G networks and support voice, full data and video applications.
Recently, Telus Corporation has also leveraged ASTS’ robust space-based connectivity infrastructure to provide satellite-based cellular service across Canada. TELUS is also becoming an equity shareholder in ASTS, indicating that this is not just a service agreement but the beginning of a long-term cooperation in the connectivity domain.
AST SpaceMobile’s vertically integrated manufacturing strategy mitigates these risks to some extent. The company owns the intellectual property and controls the manufacturing process for approximately 95% of all sub-systems used in its Block 2 BlueBird satellites. The company has also expanded its supplier base to reduce dependence on a single supplier and strengthen its supply chain.
However, unfavorable macroeconomic conditions, such as rising inflation, higher interest rates, volatility in the capital markets, imposition of tariffs and geopolitical conflicts, often negatively impact AST SpaceMobile’s operations. Fluctuations in satellite material prices due to these factors increase capital costs and affect its financial condition. Adverse movements in foreign exchange rates are worrisome. ASTS heavily relies on third-party launch providers. Any failure, delay, or underperformance by these providers is likely to disrupt the timely deployment of its satellites, potentially delaying or preventing the SpaceMobile Service from becoming operational. Regulatory policy changes in countries where ASTS operates can also impact its operations.
End Note
ASTS is set to benefit from gateway hardware sales and U.S. Government contracts. It has strategically partnered with leading telecom companies to grant customers easy access to their technology. This will likely boost commercial prospects. Moreover, growing investments from leading telecom operators such as Telus and Verizon accentuate the growing acceptance of its leading space-based communication technology. Its vertically integrated business model raises its reliability among potential clients amid growing geopolitical unrest.
However, the company is yet to launch a large-scale commercial service. Its business depends on successfully executing many difficult steps simultaneously. However, owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, or economic downturns, can significantly impact overvalued stocks like ASTS.
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What Should be Your Stance on ASTS Stock Ahead of Q1 Earnings?
Key Takeaways
AST SpaceMobile (ASTS - Free Report) is scheduled to report first-quarter 2026 earnings on May 11, 2026, after market closes. The Zacks Consensus Estimate for revenues and earnings is pegged at $38.24 million and a loss of 23 cents per share, respectively. Over the past 60 days, the earnings estimate for ASTS for fiscal 2026 has increased 1%.
ASTS Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The company delivered a negative four-quarter earnings surprise of 81.97%, on average. In the last reported quarter, the company delivered a negative earnings surprise of 44.44%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts a likely 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 exactly 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 +20.59% with a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping the Upcoming Results
During the quarter, ASTS announced that it had been selected as a prime contractor under the U.S. Missile Defense Agency’s SHIELD program. This repositions the company from a commercial satellite-to-phone connectivity to a major player in the U.S. defense and national security ecosystem. AST’s satellite architecture can have potential use cases in military communications, command-and-control systems, surveillance and other applications. A 95% vertical integration and manufacturing process under U.S.-controlled headquarters in Texas makes ASTS a secure and trustworthy partner for the U.S. defense industry.
In the quarter under review, the company secured a $30 million contract from the United States Space Development Agency (SDA) for the Europa Track 2 Commercial Solutions program. The company will integrate its commercial satellite infrastructure with existing tactical military radios to support direct satellite connectivity between government end devices. DoD aims to develop a scalable, resilient space-based defense communication architecture. This presents a solid growth opportunity for ASTS. These factors are expected to be reflected in the upcoming quarterly results.
However, the direct-to-device satellite market is becoming crowded. The company faces competition from existing and new industry leaders like SpaceX’s Starlink and Globalstar, Inc. (GSAT - Free Report) , which are developing satellite communications technology using LEO constellations. Viasat, Inc. (VSAT - Free Report) is also expanding into space-based connectivity and collaborating with major telecom operators. Such trends can impose a challenge to ASTS’ satcom growth initiatives.
Price Performance
Over the past year, ASTS has gained 152.2% compared to the industry’s growth of 73.2%. However, it has underperformed peers like ViaSat and Globalstar over this period. Viasat has increased 606.5%, while Globalstar has increased 307.1% during this period.
Image Source: Zacks Investment Research
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 65.57 forward sales, higher than 5.68 for the industry.
Image Source: Zacks Investment Research
Investment Considerations
ASTS is building the world’s first 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. Several major telecom operators worldwide are collaborating with ASTS to expand their coverage in rural and remote regions.
There are initiatives from several governments worldwide supporting this trend, as it will bridge the digital divide. Network operators such as AT&T, Verizon, Vodafone, Rakuten, Google, American Tower, Bell and stc Group and others aim to leverage ASTS capabilities to increase accessibility of high-speed 4G and 5G networks and support voice, full data and video applications.
Recently, Telus Corporation has also leveraged ASTS’ robust space-based connectivity infrastructure to provide satellite-based cellular service across Canada. TELUS is also becoming an equity shareholder in ASTS, indicating that this is not just a service agreement but the beginning of a long-term cooperation in the connectivity domain.
AST SpaceMobile’s vertically integrated manufacturing strategy mitigates these risks to some extent. The company owns the intellectual property and controls the manufacturing process for approximately 95% of all sub-systems used in its Block 2 BlueBird satellites. The company has also expanded its supplier base to reduce dependence on a single supplier and strengthen its supply chain.
However, unfavorable macroeconomic conditions, such as rising inflation, higher interest rates, volatility in the capital markets, imposition of tariffs and geopolitical conflicts, often negatively impact AST SpaceMobile’s operations. Fluctuations in satellite material prices due to these factors increase capital costs and affect its financial condition. Adverse movements in foreign exchange rates are worrisome. ASTS heavily relies on third-party launch providers. Any failure, delay, or underperformance by these providers is likely to disrupt the timely deployment of its satellites, potentially delaying or preventing the SpaceMobile Service from becoming operational. Regulatory policy changes in countries where ASTS operates can also impact its operations.
End Note
ASTS is set to benefit from gateway hardware sales and U.S. Government contracts. It has strategically partnered with leading telecom companies to grant customers easy access to their technology. This will likely boost commercial prospects. Moreover, growing investments from leading telecom operators such as Telus and Verizon accentuate the growing acceptance of its leading space-based communication technology. Its vertically integrated business model raises its reliability among potential clients amid growing geopolitical unrest.
However, the company is yet to launch a large-scale commercial service. Its business depends on successfully executing many difficult steps simultaneously. However, owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, or economic downturns, can significantly impact overvalued stocks like ASTS.