Key Takeaways
- B. Riley’s Mike Crawford raised his ASTS rating to Buy from Hold while maintaining his $85 price objective.
- Shares of AST SpaceMobile reached $133.86 in May before declining more than 50%.
- The company’s announcement of a $1 billion convertible note offering triggered a 17% single-day decline Thursday.
- Just 21% of Wall Street analysts recommend buying ASTS, significantly below the 55–60% S&P 500 norm.
- Competitive pressure from SpaceX and limited orbital access continue to weigh on investor sentiment.
Shares of AST SpaceMobile are currently hovering between $55 and $57, representing a decline of over 50% from the May high of $133.86. Following this steep retreat, at least one Wall Street analyst believes the selloff has created a compelling entry point.
Mike Crawford of B. Riley elevated his rating on ASTS to Buy from Hold this Friday, maintaining his $85 price objective. Crawford had previously lowered his stance on the stock in January when shares were trading near the $100 level. Now, with the price slashed approximately in half, he views the risk-reward profile as considerably more attractive.
On Friday, ASTS shares edged up roughly 0.7% to $55.37, even as broader market indices retreated — the S&P 500 declined 1.3% and the Dow Jones fell 0.8%.
The unchanged price target accompanying the upgrade suggests Crawford’s fundamental thesis on the company remains intact; only the valuation entry point has shifted.
Convertible Debt Offering Triggers Sharp Decline
The most dramatic single-session move occurred Thursday, when ASTS plunged 17% following the company’s disclosure of a $1 billion private placement of convertible senior notes. These securities feature an initial conversion price slightly below $80 per share — representing approximately a 20% premium to the pre-announcement trading level.
Convertible securities pose a dilution risk to current shareholders when converted into equity. Additionally, certain convertible debt purchasers employ hedging strategies that involve shorting the underlying shares to capture bond-like returns, creating additional downward pressure.
Detractors highlighted that AST was trading above $130 just weeks ago in late May. Executing this capital raise at substantially lower levels means greater dilution compared to what would have occurred at the higher valuation.
The company indicated that the capital will support expansion initiatives and help “secure additional access to orbit” for its satellite-based cellular broadband infrastructure.
The SpaceX Challenge Looms Large
While the debt offering captured immediate attention, the competitive threat posed by SpaceX represents a potentially more significant long-term concern. Starlink has already deployed an extensive satellite constellation and maintains substantial control over orbital access — precisely what AST SpaceMobile needs to expand.
SpaceX fell below its $135 IPO valuation for the first time Thursday, indicating that investor enthusiasm for the broader space industry has moderated.
Twelve months ago, 67% of analysts covering ASTS had Buy ratings. That percentage has contracted to merely 21%, substantially below the 55–60% range characteristic of S&P 500 constituents. The consensus analyst price target hovers around $87, closely aligned with Crawford’s $85 objective.
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