Alphabet Owns 8.9 Million Shares of This Hot Space Stock. Is It a Buy?
So far, the company has deployed six of its BlueBird satellites into space. Five of those are its smaller satellites with a 693 square-foot communications array. At the end of last year, the company launched its sixth satellite, a next-generation 2,400 square-foot model that is currently the largest communications satellite array deployed in low Earth orbit. A seventh satellite was encapsulated with Blue Origin's New Glenn launch vehicle, which was scheduled to launch this month.
Longer term, AST SpaceMobile aims to build a constellation of satellites providing continuous coverage across key markets, with the goal of deploying 90 to 100 satellites in low Earth orbit. Getting there will require significant capital, as each BlueBird satellite costs between $21 million and $23 million.
The good news for investors is that AST SpaceMobile has built up its war chest. At the end of last year, the company had nearly $2.8 billion in cash and equivalents. It raised another $1 billion in February through convertible senior notes and has $80 million in liquidity remaining under its existing at-the-money equity facility.
Is AST SpaceMobile stock right for you?
Looking ahead, analysts covering the stock expect AST SpaceMobile to generate $178 million in revenue this year, $805 million in 2027, and $2 billion by 2028. Those analysts also expect the company to turn a full-year profit by 2028.
AST SpaceMobile has strengthened its balance sheet, and management told investors during its most recent earnings call that it is now fully funded to manufacture and launch a constellation of 100 satellites, which would be enough to provide continuous cell service across the globe. The fact that the company is now fully funded is a good sign for investors.
That said, the stock isn't cheap by any means, and it currently trades at 155 times this year's projected sales and around 81 times the company's projected 2028 earnings. For that reason, AST SpaceMobile stock is best left to aggressive investors betting on its growth ahead who can stomach the volatility that comes with it.
Should you buy stock in AST SpaceMobile right now?
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Courtney Carlsen has positions in Alphabet. The Motley Fool has positions in and recommends AST SpaceMobile and Alphabet. The Motley Fool recommends Vodafone Group Public. The Motley Fool has a disclosure policy.
Alphabet Owns 8.9 Million Shares of This Hot Space Stock. Is It a Buy? was originally published by The Motley Fool
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