AST SpaceMobile Gains 5% as Joint European Satellite Spectrum Bid Comes Into Focus

Key Takeaways

• AST SpaceMobile shares rose 5% today after Deutsche Telekom, Orange, Telefonica and Vodafone signed a Letter of Intent to explore a joint bid for European satellite spectrum.

• The carriers haven't chosen a satellite partner, but AST already works with all four and looks like the likeliest choice.

• Analysts expect revenue to climb from $70.9 million in fiscal 2025 to $1.73 billion in fiscal 2028, while free cash flow was -$1.14 billion in fiscal 2025.

• The next thing to watch is whether the carriers name AST as their partner, with the spectrum itself likely assigned in 2029.

AST SpaceMobile ( ASTS:NASDAQ )is up 5% today after four of Europe's biggest carriers said they're exploring a joint bid for satellite spectrum there.

Europe's big four want in

Before the open this morning, AST announced that Deutsche Telekom ( DTEGY ), Orange(ORANY), Telefónica(TEF) and Vodafone ( VOD )had signed a Letter of Intent to explore a joint bid for Mobile Satellite Services spectrum in Europe. AST calls all four its partners and is already testing its network with each.

Its European joint venture, Satellite Connect Europe, is building the ground network that links AST's BlueBird satellites to the carriers' core networks. AST puts that market at more than 500 million mobile subscribers.

The partner hasn't been picked

But the carriers' own statement describes the bid with "a satellite partner still to be selected." Deutsche Telekom also plans to use Starlink from SpaceX ( SPCX:NASDAQ )in Germany from around 2028, and the letter leaves the carriers' existing satellite deals in place.

The European Commission's own planning also points to the spectrum being assigned in 2029.

The cash has to last until then

Analysts already expect revenue to climb from $70.9 million in fiscal 2025 to $1.73 billion in fiscal 2028…

A Letter of Intent shouldn't move those estimates, which end a year before Europe would hand out the spectrum.

Getting there is expensive. Free cash flow has been negative every year since 2021, and the burn reached $1.14 billion in fiscal 2025…

Analysts expect about $3.2 billion more before 2029. AST has pro forma liquidity of more than $3.7 billion after its latest convertible notes offering, so the money is there, with little to spare.

After losing more than half its value since May, AST traded at 39x forward sales as of the last close. That's well below its three-year average of 74x and its October 2025 peak of 205x…

At today's price, it's closer to 42x. That's still a steep price for revenue AST hasn't earned yet. It's still cheaper than, say, SpaceX, but also comes without Elon Musk's name attached…