Here's What Investors Need to Know About AST SpaceMobile Stock's Recent Pullback

Late last year, AST SpaceMobile (NASDAQ: ASTS) launched Bluebird 6, the largest communications-array antenna ever in low Earth orbit (LEO), but the stock actually began soaring into the stratosphere earlier in 2025.

AST SpaceMobile's shares are up more than 196% over the past year and more than 11% so far in 2026. The buzz propelling that gain stemmed from the company's LEO satellites, which will enable 4G and 5G smartphones to connect from anywhere in the world, not just where ground-based cell towers and broadband are available.

The company's latest satellite will deliver speeds of up to 120 megabits per second, enabling cellphones to do everything they do now with a direct connection -- streaming, talking, texting, etc. AST plans to launch 45 to 60 satellites by the end of this year. The bull case is obvious: AST will enjoy a significant first-to-market advantage in direct-to-device technology. It already has partnerships in place with AT&T, Verizon, Vodafone, Rakuten, Alphabet, American Tower, Nokia, and Saudi Arabian cellphone company stc Group. However, before you jump in and invest, you need to understand both AST SpaceMobile's challenges and its biggest advantage.

Image source: Getty Images.

Ups and downs

First, it's important to note that the stock's recent arc has been carrying it back down to Earth.

AST SpaceMobile hit a 52-week high of $129.30 on Jan. 30, but by midday Friday, it was trading around $81, a pullback of about 37%. Much of that slide was likely due to the company's capital restructuring in mid-February.

On Feb. 12, the company announced a private offering of $1 billion in senior convertible notes, due in 2036, and it also priced registered direct offerings of Class A common stock to fund the repurchase of older convertible notes. The company raised a total of $3.9 billion, but also increased its share count. The combination devalued the company's shares and raised concerns about the growing costs it faces as it ramps up its pace of satellite launches.

It's nowhere close to being profitable

Launching satellites is expensive, and AST SpaceMobile needs to raise a lot more capital to fund its ambitious plans. In 2025, it took a big leap forward on the business front, reporting $70.9 million in revenue, up from $4.4 million in 2024. Even with that, it is still deeply unprofitable, booking a net loss of more than $340 million (or $1.34 per share) in 2025. As of the end of 2025, its long-term net debt had soared to $2.2 billion, and it had $2.3 billion in cash on the books, so even in the wake of its recent financial maneuvers, it will likely have to raise more to fund its efforts at some point.

That means it will likely sell more stock or raise money through its strategic partnerships. Either way, it will probably be years before it will have the potential to become consistently profitable.

Much of its eventual hoped-for value is already baked into the stock's price. Its price-to-sales ratio is a lofty 288.6, which means investors buying the stock today are paying more than $288 for every $1 in sales the company generates. So the market is obviously pricing the stock speculatively, based on an idea of what the company's earnings could potentially be.

The space race is definitely on

Though AST SpaceMobile may have a bit of a lead in terms of deploying its satellite constellation at this point, other companies are jockeying to deliver similar services. SpaceX subsidiary Starlink already is providing basic direct-to-cell messaging, and unlike AST SpaceMobile, SpaceX has its own rockets. Lynk Global, a direct-to-device competitor, has a small fleet of satellites in orbit and is exploring bypassing ground-station bottlenecks by using a series of inter-satellite links.

Even AST SpaceMobile's cellular network partners could be competitors, in a sense. As 5G and future 6G coverage expands on the ground, the amount of land area not covered by terrestrial cell networks will likely shrink further, reducing the area where a satellite-based service like AST's would be a necessity.

However, the company does have a backer in the U.S. government. On Feb. 23, AST SpaceMobile announced it had landed a $30 million contract from the Space Development Agency. The agreement, executed under the Hybrid Acquisition for Proliferated Low-Earth Orbit program, shows that the technology has "dual-use" potential for secure tactical military communications, opening up a lucrative second revenue stream for it.

AST SpaceMobile stock has experienced pullbacks before, and so far, it has always come back higher. Now that the company is finally growing its revenues, the current pullback is offering investors another opportunity to get into what is certainly a growth stock, albeit one that faces some short-term risks.

James Halley has positions in Alphabet and Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile, Alphabet, and American Tower. The Motley Fool recommends Verizon Communications and Vodafone Group Public. The Motley Fool has a disclosure policy.