Better Space Stock: AST SpaceMobile vs. Redwire

Booming space stocks have started to bust after a multiyear run. This timed up perfectly after the Space Exploration Technologies IPO last month, which has sent many stocks down in an elevator-like fashion in the ensuing weeks. AST SpaceMobile (NASDAQ: ASTS) is down 52% from its highs, while Redwire (NYSE: RDW) has fallen 64%, taking investors on a roller coaster of volatility.

The two space economy stocks are now trading at massive discounts compared to just a few weeks ago. But which is the better buy for your portfolio today? If you look at the numbers, the answer is clear.

Image source: Getty Images.

AST SpaceMobile operates in a competitive satellite internet sector

AST SpaceMobile has seen significant appreciation in its share price, pushing its market capitalization to $22 billion despite generating close to zero revenue. Investors are excited about this stock because it aims to build a satellite internet business with direct-to-device capabilities. This means that it will beam the internet directly to a smartphone without the need to carry around a terminal everywhere, as is necessary today with SpaceX's Starlink service.

Its technology has proven effective, giving it an addressable market of billions, if not tens of billions, in the fast-growing satellite internet market. However, AST SpaceMobile has just launched its 10th satellite into orbit, and will need many more to build a truly global service that reaches millions of customers simultaneously. Management's goal is to deploy 45 satellites by the end of 2026, but it is well behind schedule so far.

Where AST SpaceMobile runs into issues is the need to rely on launch partners to get its payloads into orbit, including SpaceX, its competitor. SpaceX prioritizes its own satellites over AST SpaceMobile's, which may delay AST SpaceMobile's satellites from reaching orbit in a timely manner.

AST SpaceMobile is currently generating little in revenue and is burning a lot of cash, with negative free cash flow of $1.37 billion over the past 12 months. This cash burn is likely to continue for the next few years, which is why management just added more debt to its balance sheet. At the same time, SpaceX is working on its own direct-to-device technology that could render moot any burgeoning competitive advantage from AST SpaceMobile.

Redwire is a diversified defense and space technologies provider

Redwire is a defense and space economy player, but it's not centered on one bet in satellite internet like AST SpaceMobile. The company operates in many different subsectors, including drones, communication systems, energy, and spacecraft, and also caters to the defense market. With the rising budget for the Space Force and the increasing priority of space systems in the United States' defense, Redwire has a potentially massive tailwind for its business over the next decade.

Investors are seeing that play out in its financial performance. Last quarter, the company's book-to-bill ratio -- which measures the amount of new contracts it won versus how much it billed in the period -- was 1.92x, helping its backlog increase to $498 million.

For the full year, Redwire expects revenue of $450 million to $500 million, up from $371 million in the last 12 months. It is not yet profitable, but is seeing a rapid improvement in gross margins, from 14.7% in the first quarter of 2025 to 26.6% in Q1 2026. It is burning less in free cash flow than AST SpaceMobile, at negative $165 million over the last 12 months, making any liquidity issues less of a concern for shareholders.

Data by YCharts.

Which is the better buy?

AST SpaceMobile has massive growth potential. But that also comes with far more risks than the more established revenue drivers of a company like Redwire. Plus, AST SpaceMobile is on a steep cash burn trajectory that could deplete its cash balance within a few years.

Redwire also trades at a much more reasonable multiple of its trailing sales, with a price-to-sales ratio (P/S) of 3.5 compared to AST SpaceMobile's 187. Redwire has a smaller market cap of $2 billion compared to AST SpaceMobile's $22 billion.

Add it all up, and Redwire looks like a more promising space stock than AST SpaceMobile today.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool has a disclosure policy.