AST SpaceMobile can handle Starlink, this analyst says

Roth Capital Partners analyst Scott Searle maintained his “Buy” rating and US$108 target on AST SpaceMobile (AST SpaceMobile Stock Quote, Chart, News, Analysts, Financials NASDAQ:ASTS), arguing that concerns about competition from SpaceX’s Starlink have been overstated.

In an Oct. 19 update, Searle noted that AST SpaceMobile shares have fallen 69% since late May amid growing concerns about Starlink’s expansion into satellite-to-smartphone services.

The analyst said SpaceX’s recent US$8-billion acquisition of wireless spectrum from Grain Management has intensified those concerns, but investors are overlooking fundamental differences between the companies’ business models.

AST SpaceMobile partners with mobile network operators to extend coverage beyond traditional cellular networks, while Starlink is pursuing a more direct competitive approach.

Searle noted that AST SpaceMobile has partnerships with more than 60 mobile network operators serving over three billion subscribers globally.

“Spectrum is nice, partnerships are better,” Searle said.

He pointed out that Starlink has accumulated about 80 megahertz of spectrum, compared with more than 300 megahertz held by each of the major U.S. wireless carriers.

Through its partnerships, AST SpaceMobile can use existing carrier spectrum rather than acquiring comparable holdings itself.

Searle also argued that Starlink’s satellite network has significantly less capacity than traditional U.S. cellular networks, limiting its ability to compete directly for mainstream mobile subscribers.

He estimates Starlink’s capacity at less than 5% of that available through major U.S. mobile networks.

By contrast, AST SpaceMobile is focused on filling coverage gaps rather than replacing terrestrial service.

Searle said the company’s partnership model also positions it to benefit from growing interest in sovereign satellite networks, as governments seek greater control over critical communications infrastructure.

He pointed to AST SpaceMobile’s Japanese joint venture with Rakuten, which has received government support of approximately US$926-million, as an example of that opportunity.

Searle expects demand for dedicated national satellite networks to increase beginning in 2027, particularly in the Middle East.

He said concerns about dependence on Starlink for critical communications could also favour independent providers such as AST SpaceMobile.

Despite recent launch delays, Searle said AST SpaceMobile remains broadly on track to begin commercial service in early 2027.

BlueBird satellites 14 through 16 have arrived at Cape Canaveral for launch, while satellites 17 through 50 are in various stages of production.

However, he acknowledged that launch schedules remain uncertain, with the company relying heavily on SpaceX’s Falcon 9 until additional launch options become available.

Searle said diversifying launch providers will be important as AST SpaceMobile expands beyond the initial 45 satellites required for commercialization.

His US$108 target is based on 30 times estimated calendar 2030 EPS, discounted back three years at 10%.

Searle expects AST SpaceMobile to generate negative Adjusted EBITDA of US$310-million on revenue of US$154.1-million in calendar 2026, improving to Adjusted EBITDA of US$275-million on revenue of US$834.1-million in calendar 2027.

He said manufacturing milestones, additional launches and the start of commercial service could help restore investor confidence, although he expects continued near-term share-price volatility.

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