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AST SpaceMobile Stock Surges 69%: Analysis, Predictions, and Long-Term Potential

StockInvest.us, 3 weeks ago

AST SpaceMobile, Inc. Technical Analysis

AST SpaceMobile, Inc. (ASTS) saw an impressive surge in price on May 29, 2024, closing at $9.02, up 69.23% from the previous close. The stock hit a year high of $9.35 and had a year low of $1.97. The Relative Strength Index (RSI14) stands at 85, indicating that the stock is currently overbought. The impressive volume of 105.64 million shares traded far exceeds the average volume of 5.90 million.

The stock price is significantly above both its 50-day moving average ($2.74) and 200-day moving average ($3.63), showing strong bullish momentum. The Moving Average Convergence Divergence (MACD) of 0.6006 further supports the bullish trend. However, the Average True Range (ATR) of 8.69 suggests high volatility which traders should note.

Fundamental Analysis

The recent surge in AST SpaceMobile's stock can be attributed to strategic partnerships with Verizon and AT&T. These partnerships aim to provide satellite-to-cellphone services, significantly boosting ASTS' market position and growth potential. The market capitalization is at $2.32 billion.

From a valuation perspective, ASTS is showing a negative Earnings Per Share (EPS) of -$1, resulting in a negative Price-to-Earnings (PE) ratio of -9.02, indicating that the company is currently unprofitable. The earnings announcement, scheduled for August 12, 2024, will provide more insights into whether the company can turn profitable.

A notable factor is the discounted cash flow (DCF) model, which estimates the intrinsic value at approximately $0.19, far below the current trading price. This discrepancy suggests that the stock might be overvalued at current levels based on fundamental value.

AST SpaceMobile, Inc. Predictions and Short-Term Performance

For the next trading day (May 30, 2024), ASTS is likely to experience continued volatility given the sharp recent movements and high trading volumes. Immediate price support or resistance levels are undefined, but investors should watch the stop-loss level around $8.72 to manage downside risk.

Over the upcoming week, the stock's performance will heavily depend on further developments related to the Verizon partnership and any additional news regarding its ventures with AT&T. Given the overbought RSI and substantial price jump, some short-term profit-taking could lead to a minor pullback.

Intrinsic Value and Long-Term Investment Potential

While the recent deals with major telecom players like Verizon and AT&T significantly boost AST SpaceMobile's market appeal and potential revenue streams, the high current price relative to the DCF valuation raises questions about long-term intrinsic value. Investors should consider the company's ability to convert these partnerships into tangible financial performance indicators over time.

Overall Evaluation: Hold

Taking into account the strong bullish momentum driven by strategic partnerships and the high trading volumes, ASTS currently displays characteristics of a volatile stock more suited for short-term trading rather than long-term investment. However, the fundamental weaknesses, notably the negative EPS and high DCF discrepancy, advise caution. Therefore, a ‘Hold’ classification is suggested, allowing investors to monitor for sustained performance improvements and potential profitability before making more significant long-term commitments.

Check full AST SpaceMobile, Inc. forecast and analysis here.