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Should You Exercise Caution on ASTS Stock After Soft Q3 Results?
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Key Takeaways
ASTS reported a Q3 loss of 44 cents per share, while revenues surged 187.1% to $42.32 million.
ASTS' operating expenses jumped 123.5% to $211.03 million, pressuring profitability.
ASTS targets 45 BlueBird satellites in orbit by mid-2027, but widening loss estimates cloud its growth.
AST SpaceMobile, Inc. (ASTS - Free Report) reported soft third-quarter 2026 results, with both the top and bottom lines missing the Zacks Consensus Estimate. The company reported a loss of 44 cents per share, wider than the consensus estimate of a loss of 41 cents, representing a negative surprise of 7.3%. However, the loss narrowed from 45 cents per share in the year-ago quarter.
Quarterly revenues surged 187.1% year over year to $42.32 million but missed the consensus estimate of $44.47 million by 4.8%. Growth was driven by commercial gateway deliveries and U.S. government contract milestones. However, elevated operating expenses continued to pressure profitability.
Elevated Operating Costs Hurt ASTS
Elevated spending overshadowed the company’s progress in satellite deployment and commercial partnerships during the quarter. The bottom-line miss primarily reflected AST SpaceMobile’s rapidly expanding cost base as it accelerates the buildout of its space-based cellular broadband network. Total operating expenses increased 123.5% year over year to $211.03 million from $94.42 million. Engineering services costs surged 134.6% to $95.79 million, reflecting investments in satellite manufacturing, workforce expansion and network development. General and administrative expenses increased 86.8% to $55.71 million, while research and development expenses rose to $9.09 million from $5.53 million.
Unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility and geopolitical conflicts, have adversely impacted AST SpaceMobile. These have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance. Due to high infrastructure setup costs and research and development expenses for highly sophisticated satellite technology, AST SpaceMobile expects significant expenditures in the coming months to build and launch the next crop of satellites, in line with its expansion plans to serve the full spectrum of U.S. subscribers.
The combination of the earnings miss and rising expenditures likely reinforced investor concerns over how quickly AST SpaceMobile can translate its technological and deployment progress into healthy recurring revenues and improving profitability. The miss is particularly noteworthy given ASTS’ elevated growth expectations. The company is transitioning from a development-stage satellite operator toward scaled commercial service, making the pace at which satellite deployments convert into revenues an increasingly important metric for investors.
Image Source: Zacks Investment Research
ASTS Remains Committed to Satellite Manufacturing and Deployment
Despite the dip in quarterly performance, AST SpaceMobile has accelerated its satellite manufacturing roadmap by advancing next-generation application-specific integrated circuit (ASIC) integration to BlueBird 34 from the originally planned BlueBird 50. The upgraded technology is expected to deliver a 10-fold improvement in processing bandwidth compared with its existing Block 1 satellites.
The company is manufacturing satellites through BlueBird 51 at its Texas facilities. Two factories are operating full shifts, supporting management's target of producing six ASIC-enabled satellites monthly by December 2026. BlueBirds 14, 15 and 16 have been shipped to Cape Canaveral, while additional satellite shipments are planned through January 2027. Management targets approximately 45 BlueBird satellites in orbit by mid-2027, with launch agreements covering more than 100 satellites for deployment during 2027 and 2028.
Utilizing large phased array antennas measuring approximately 2,400 square feet, AST SpaceMobile's technology is backed by more than 3,900 patents and patent-pending claims. This design aims to deliver global cellular coverage by eliminating dead zones and providing space-based connectivity to areas without broadband service. By connecting directly to standard smartphones at broadband speeds, these advanced phased arrays eliminate the need for special equipment, enhancing current mobile networks while ensuring seamless use of existing mobile phones. The SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones.
Price Performance
AST SpaceMobile has declined 47.8% over the past year against the industry’s growth of 13%. It has lagged peers like Aviat Networks, Inc. (AVNW - Free Report) , but outperformed Comtech Telecommunications Corp. (CMTL - Free Report) over this period. While Aviat has declined 31.3%, Comtech has fallen 64.2% over the same period.
One-Year ASTS Stock Price Performance
Image Source: Zacks Investment Research
Estimate Revision Trend of ASTS
The Zacks Consensus Estimate for AST SpaceMobile’s loss for 2026 and 2027 has widened 210.8% and 521.4%, respectively, to a loss of $2.30 and a loss of $1.18 per share over the past year. The negative estimate revision depicts pessimism about the stock’s growth potential as investors remain skeptical about the success of its business model.
Image Source: Zacks Investment Research
End Note
The collaboration with leading carriers is seen as a pathway to unlocking the potential of space-based cellular broadband, promising seamless, reliable service across the continental United States and Canada. The successful launch of the Bluebird satellites will likely transform network connectivity and help bridge the digital divide, significantly expanding its global presence and enhancing AST SpaceMobile’s capabilities in providing ubiquitous connectivity.
However, with a Zacks Rank #3 (Hold), AST SpaceMobile appears to be treading in the middle of the road, and investors may prefer to remain on the sidelines until greater visibility emerges regarding the commercial-service ramp and the path toward improving operating leverage. While ASTS’ long-term opportunity in direct-to-device satellite connectivity remains compelling, the third-quarter miss shows that considerable execution will be required before that opportunity is fully reflected in its financial performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The downtrend in estimate revisions further portrays skepticism about the business model. Consequently, it might be prudent to avoid the stock at the moment.
View the Zacks #1 Rank List
Image: Bigstock
Should You Exercise Caution on ASTS Stock After Soft Q3 Results?
Key Takeaways
AST SpaceMobile, Inc. (ASTS - Free Report) reported soft third-quarter 2026 results, with both the top and bottom lines missing the Zacks Consensus Estimate. The company reported a loss of 44 cents per share, wider than the consensus estimate of a loss of 41 cents, representing a negative surprise of 7.3%. However, the loss narrowed from 45 cents per share in the year-ago quarter.
Quarterly revenues surged 187.1% year over year to $42.32 million but missed the consensus estimate of $44.47 million by 4.8%. Growth was driven by commercial gateway deliveries and U.S. government contract milestones. However, elevated operating expenses continued to pressure profitability.
Elevated Operating Costs Hurt ASTS
Elevated spending overshadowed the company’s progress in satellite deployment and commercial partnerships during the quarter. The bottom-line miss primarily reflected AST SpaceMobile’s rapidly expanding cost base as it accelerates the buildout of its space-based cellular broadband network. Total operating expenses increased 123.5% year over year to $211.03 million from $94.42 million. Engineering services costs surged 134.6% to $95.79 million, reflecting investments in satellite manufacturing, workforce expansion and network development. General and administrative expenses increased 86.8% to $55.71 million, while research and development expenses rose to $9.09 million from $5.53 million.
Unfavorable macroeconomic conditions, including rising inflation, higher interest rates, capital market volatility and geopolitical conflicts, have adversely impacted AST SpaceMobile. These have led to continued fluctuations in satellite material prices, resulting in increased capital costs and pressure on the company’s financial performance. Due to high infrastructure setup costs and research and development expenses for highly sophisticated satellite technology, AST SpaceMobile expects significant expenditures in the coming months to build and launch the next crop of satellites, in line with its expansion plans to serve the full spectrum of U.S. subscribers.
The combination of the earnings miss and rising expenditures likely reinforced investor concerns over how quickly AST SpaceMobile can translate its technological and deployment progress into healthy recurring revenues and improving profitability. The miss is particularly noteworthy given ASTS’ elevated growth expectations. The company is transitioning from a development-stage satellite operator toward scaled commercial service, making the pace at which satellite deployments convert into revenues an increasingly important metric for investors.
Image Source: Zacks Investment Research
ASTS Remains Committed to Satellite Manufacturing and Deployment
Despite the dip in quarterly performance, AST SpaceMobile has accelerated its satellite manufacturing roadmap by advancing next-generation application-specific integrated circuit (ASIC) integration to BlueBird 34 from the originally planned BlueBird 50. The upgraded technology is expected to deliver a 10-fold improvement in processing bandwidth compared with its existing Block 1 satellites.
The company is manufacturing satellites through BlueBird 51 at its Texas facilities. Two factories are operating full shifts, supporting management's target of producing six ASIC-enabled satellites monthly by December 2026. BlueBirds 14, 15 and 16 have been shipped to Cape Canaveral, while additional satellite shipments are planned through January 2027. Management targets approximately 45 BlueBird satellites in orbit by mid-2027, with launch agreements covering more than 100 satellites for deployment during 2027 and 2028.
Utilizing large phased array antennas measuring approximately 2,400 square feet, AST SpaceMobile's technology is backed by more than 3,900 patents and patent-pending claims. This design aims to deliver global cellular coverage by eliminating dead zones and providing space-based connectivity to areas without broadband service. By connecting directly to standard smartphones at broadband speeds, these advanced phased arrays eliminate the need for special equipment, enhancing current mobile networks while ensuring seamless use of existing mobile phones. The SpaceMobile service is compatible with all major brands available in the market and connects directly to everyday mobile phones.
Price Performance
AST SpaceMobile has declined 47.8% over the past year against the industry’s growth of 13%. It has lagged peers like Aviat Networks, Inc. (AVNW - Free Report) , but outperformed Comtech Telecommunications Corp. (CMTL - Free Report) over this period. While Aviat has declined 31.3%, Comtech has fallen 64.2% over the same period.
One-Year ASTS Stock Price Performance
Image Source: Zacks Investment Research
Estimate Revision Trend of ASTS
The Zacks Consensus Estimate for AST SpaceMobile’s loss for 2026 and 2027 has widened 210.8% and 521.4%, respectively, to a loss of $2.30 and a loss of $1.18 per share over the past year. The negative estimate revision depicts pessimism about the stock’s growth potential as investors remain skeptical about the success of its business model.
Image Source: Zacks Investment Research
End Note
The collaboration with leading carriers is seen as a pathway to unlocking the potential of space-based cellular broadband, promising seamless, reliable service across the continental United States and Canada. The successful launch of the Bluebird satellites will likely transform network connectivity and help bridge the digital divide, significantly expanding its global presence and enhancing AST SpaceMobile’s capabilities in providing ubiquitous connectivity.
However, with a Zacks Rank #3 (Hold), AST SpaceMobile appears to be treading in the middle of the road, and investors may prefer to remain on the sidelines until greater visibility emerges regarding the commercial-service ramp and the path toward improving operating leverage. While ASTS’ long-term opportunity in direct-to-device satellite connectivity remains compelling, the third-quarter miss shows that considerable execution will be required before that opportunity is fully reflected in its financial performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The downtrend in estimate revisions further portrays skepticism about the business model. Consequently, it might be prudent to avoid the stock at the moment.