AST SpaceMobile's Big Win: Shares Soar on New Deal With Verizon
When it comes to stocks that have excited and rewarded investors in 2025, AST SpaceMobile (NASDAQ: ASTS) is clearly at the top of the list. Through the Oct. 8 close, shares are up by approximately 311%, an incredible showing.
Now, ASTS investors may be feeling as confident as ever, given the firm’s latest deal with a top telecom company. On Oct. 8, the company announced a deal with Verizon Communications (NYSE: VZ). Through the deal, AST will “provide direct-to-cellular AST SpaceMobile service when needed for Verizon customers starting in 2026." Overall, the announcement sent shares of ASTS up by around 16% in two days. Below, we’ll break down what this announcement means for ASTS stock and provide perspective on its valuation.
Verizon Moves From ASTS Financier to Customer
In 2026, Verizon will start rolling out a service that allows customers to connect to AST SpaceMobile’s low Earth orbit satellites. This will allow them to have a cellular connection even in highly remote parts of the United States. The deal is a validation of AST’s business model and a positive step in the company’s path to sales. It builds on the firm’s 2024 deal with Verizon. That deal helped fund the exploration of the “definitive commercial agreement" that the two are now implementing.
This commercial agreement establishes a clear path for AST to generate significant and potentially recurring revenues in the not-too-distant future. It also builds upon similar agreements the firm has made with telecom giants AT&T (NYSE: T) and Vodafone (NASDAQ: VOD). Through these huge partnerships, the company has undoubtedly established itself as a leader in its niche. AST SpaceMobile is clearly capitalizing on the fiercely competitive telecom industry, with major players looking to keep pace with each other. Still, investors know little about the financial details of these agreements. This makes it hard to know how much revenue AST will generate from them, and at what costs.
ASTS’s Valuations Chasm: Current Results vs. Forward Estimates
When it comes to AST SpaceMobile, investors should be aware of the massive divergence in the stock’s current results and forward expectations. Over the last 12 months (LTM), AST SpaceMobile has generated just $4.9 million in revenue. Despite this, the stock trades at a market capitalization of approximately $31.4 billion. Among all U.S. stocks that have generated $10 million or less in LTM revenue, ASTS’s market capitalization is the highest. Notably, Rigetti Computing (NASDAQ: RGTI) is the next highest-valued company among this group. Its market cap is just $14.5 billion, showing how AST’s backward-looking valuation is rich even among speculative stocks.
However, revenue expectations help justify the company's valuation. In 2027 and 2028, analysts expect the firm to generate revenues of $830 million and $2.54 billion, respectively. This would give the stock forward price-to-sales (P/S) ratios of 38x and 12x in those periods. This makes the stock look much more reasonably valued compared to other high-flying names. For example, analysts expect Rigetti and Joby Aviation (NYSE: JOBY) to generate $40 million and $144 million in revenue in 2027. This gives them forward P/S ratios of 374x and 100x for that period.
Still, among U.S. telecom stocks with 2027 revenue projections, ASTS’s forward P/S ratio is by far the highest. The average figure among this group is just 4x.
ASTS: Analyst Forecasts Signal Nearly 50% Downside in Shares
Still, these projections are just that: projections. ASTS’s actual performance could be significantly better or worse than these estimates. However, as a baseline, these estimates imply that AST SpaceMobile will grow its revenues from $4.9 million to $830 million in just three and a half years. It feels fair to say that a lot of things would need to go right for AST SpaceMobile to achieve this.
Despite lofty forward projections over the next few years, analysts see ASTS as overvalued in the near term. The MarketBeat consensus price target on the stock is just over $45. This implies around 48% downside in shares versus their Oct. 9 closing price. Barclays recently raised its price target considerably from $37 to $60. This is the most bullish forecast that MarketBeat has tracked in 2025, and still implies around 39% downside. However, MarketBeat has not yet tracked any analysts who have altered their price target since the Oct. 8 deal. Its possible updates could come, shifting the overall picture of analyst sentiment around ASTS.
Ultimately, the bearish indicators around ASTS do not mean that shares won’t continue to rise. However, investors should understand the considerable amount of risk in this stock.
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