Why AST SpaceMobile Stock Just Crashed
Key Points
ATS SpaceMobile missed badly on earnings last night.
The DTC cellphone provider still hopes to get 45 satellites total in orbit by the end of this year.
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AST SpaceMobile (NASDAQ: ASTS) stock tumbled an unlucky 13.3% through 11:35 a.m. ET Tuesday after missing badly on Q1 earnings last night.
Heading into the report, analysts weren't optimistic, predicting the direct-to-cell satellite company would lose $0.21 per share on sales of $37.5 million. In fact, AST lost $0.66 per share, and sales were less than half the prediction -- $14.7 million.
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AST SpaceMobile Q1 "earnings"
Still largely in start-up status, and not yet having announced even beta service for consumer use of its DTC satellites (although some government revenue is already coming in), AST is growing revenue off an exceedingly tiny base -- allowing for eye-popping gains.
Revenue in Q1 grew 20-fold year over year, albeit not yet profitably. Gross profit margin looks to be about 21% for the quarter. Operating costs grew 158% year over year. On the bottom line, AST lost more than three times as much money in Q1 2026 as in Q1 2025.
The company's cash burn rate remains alarming, with negative free cash flow of as much as $427.4 million in the quarter, including "capital advances" made to lease L-Band spectrum from Ligado Networks.
AST SpaceMobile guidance
The good news is that AST said in its post-earnings conference call with analysts that it has $3.5 billion in cash and equivalents to cover the cash burn. The better news is that it is spending its money on the goal of quickly launching, by June, three more BlueBird satellites to replace the one destroyed in an attempted Blue Origin rocket launch last month -- then growing its constellation to 45 satellites by the end of this year.
Will this be enough to allow AST to begin beta service this year? Management made no commitments on this score, but... fingers crossed.
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Rich Smith 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.
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