Shares of satellite startup AST SpaceMobile have made a strong comeback, regaining their losses following President-elect Donald Trump’s recent victory. The Texas-headquartered company is considered a challenger to Elon Musk’s SpaceX, which makes Starlink satellites. AST SpaceMobile says it is building “the first and only space-based cellular broadband network.” It launched five satellites in collaboration with telecom giant AT & T earlier this year, and 17 more are scheduled for early next year. These will add to the 150 target for this decade as it looks to achieve full global connectivity. However, the start-up’s stock tanked by about 10% in the two days after the U.S. elections as investors feared the company might be disadvantaged due to Musk’s close relationship with the new U.S. administration. Musk, the CEO of SpaceX, has voiced strong support for Trump and participated in Republican campaign events over the past several months. ASTS 1Y line Scotiabank analysts suggest that Musk’s political alignment could benefit SpaceX’s efforts to obtain a crucial regulatory waiver from the Federal Communications Commission (FCC) to operate its direct-to-cell (DTC) satellites, allowing it to compete with ASTS more directly. DTC satellites enable text messaging, calling, and internet connectivity anywhere in the world from mobile handsets. “Without the waiver, Starlink’s DTC satellites can’t function at full power,” Scotiabank analysts Andres Coello and Leonardo Curtidor said in a note to clients on Nov. 6. The investment bank’s analysts believe this benefits AST SpaceMobile, which has “superior technology” that allows it to comply with existing FCC regulations. The investment bank has a $45.90 price target for the stock, which points to a 90% upside potential. ‘A David vs. Goliath fight’ Deutsche Bank analysts are also bullish on AST SpaceMobile, increasing their price target to $63 in September. This currently points to a 154% upside. However, analysts say that for AST SpaceMobile to succeed, it will have to move quickly to gain market share, as Musk’s SpaceX is likely only a few months behind in launching a competing service. “ASTS may still have precious months ahead to build continuous coverage in the U.S. before SpaceX is granted the waiver,” said Scotiabank’s Coello and Curtidor. “This is a David vs. Goliath fight; we believe ASTS’s superior technology will prevail.” The consensus price target of four analysts polled by FactSet points to a 65% upside for ASTS. — CNBC’s Michael Bloom contributed reporting.
