ASTS Valued at $30 Billion Despite Minimal Revenue and High Cash Burn, Reddit Sentiment Turns Negative

What happened

AST SpaceMobile's stock is trading near $80, giving it a market capitalization of approximately $30 billion, as reported on early Monday. This valuation contrasts sharply with its financial performance, generating only $14.74 million in revenue last quarter while burning $363 million annually in operating cash flow. According to the DeepValue master report, ASTS is rated as a 'POTENTIAL SELL' with a conviction of 3.5, highlighting its dependency on unproven milestones like FCC approvals and launch cadence. The report emphasizes that the company has no SpaceMobile Service revenue yet and faces critical risks in regulatory timelines and capital access. Recent sentiment on platforms like Reddit has turned bearish, reflecting growing concerns over the stock's elevated price amidst these fundamental challenges.

Implication

The high valuation leaves little margin for error, as any delay in FCC approvals could push monetization into 2027, eroding investor confidence. Cash burn of $363 million annually pressures the balance sheet, increasing dilution risk if additional capital is needed through equity offerings. Launch cadence must accelerate to meet the 2026 commercial start, but past variability and dependency on capital availability raise execution concerns. Competitive pressures from Starlink and others are tightening the window for ASTS to establish its service, potentially capping upside even if milestones are met. Without tangible revenue growth or regulatory breakthroughs, the stock is vulnerable to a significant correction towards the bear case target of $55, as outlined in the DeepValue report.

Thesis delta

The news article reinforces the DeepValue report's bearish stance by highlighting the stark disconnect between ASTS's market cap and its financial fundamentals. It underscores that investor sentiment is aligning with the risks outlined in the report, particularly regarding cash burn and valuation, but no new information alters the core thesis. However, it emphasizes the urgency of monitoring the 90-day checkpoints for FCC progress and launch cadence, as failure could accelerate a sell-off.