AST Spacemobile (ASTS) PT Raised to $36 at B.Riley, 'remains the clear leader in the race'

B.Riley analyst Mike Crawford raised the price target on AST Spacemobile (NASDAQ: ASTS) to $36.00 (from $26.00) while maintaining a Buy rating.

The analyst commented: "We kicked off the symposium with ASTS president and chief strategy officer Scott Wisniewski and CFO Andrew Johnson discussing the company’s progress toward inaugural commercial service, expected roughly three months following deployment of the first five Block 1 BlueBird (BB) satellites, which remain on track to launch in early September, with planning and production of the next 17 Block 2 BBs underway. Following the discussion, we adjust our model, now projecting ASTS to exit 3Q24 with just shy of $400M in cash, as well as $145M from the forced conversion of de-SPAC warrants after ASTS announced on 8/28 it will redeem any outstanding warrants on 9/27, we believe enabling accelerated constellation deployment and time to revenue. Furthermore, we continue to believe ASTS has various additional sources of capital available to fund the deployment of its SpaceMobile constellation. Possible examples include sovereign funding from the U.S. Ex-Im Bank and/or others as well as a repeatable pre-payment template for government and MNO customers wishing to secure access to the network, not to mention potential investment from the U.S. First Responder Network Authority (FirstNet), which held a board meeting on 8/21 where the agency discussed planned satellite to device investment in its GFY25 (Sep) budget, which includes $534M allocated to fund network enhancements to expand coverage. As a result, we increase our FY25e revenue and EBITDA from $130M/$(37M) to $150M/$(19M), and we look to publish FY26 estimates after Block 1 BBs are in orbit. We note that investors should beware of potential headline risk given that at least one other analyst has a $68M revenue estimate for 3Q24 and a $1.3B revenue estimate for FY25 (vs. our $1M and $150M estimates, respectively). At the same time, we increase our PT from $26 to $36, representing an $11.4B EV at the end of FY25, assuming in the money notes convert to common, for AST SpaceMobile—a company that we believe remains the clear leader in the race to enable true direct-to-device (D2D) broadband connectivity."

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