Shares of AST SpaceMobile experienced a notable decline on Friday following an uncommon double downgrade from an analyst at Barclays. The satellite communications company, which has seen its stock value increase by more than 300% this year, was downgraded from a "Buy" to a "Sell" rating due to concerns over its high valuation.
The downgrade occurred despite the analyst's positive outlook on the company's long-term potential in the direct-to-device satellite data market. The move highlights a growing concern among some financial experts that the stock's rapid ascent has outpaced its fundamental financial projections.
Key Takeaways
- Barclays analyst Mathieu Robilliard downgraded AST SpaceMobile (ASTS) stock directly from a Buy to a Sell rating.
- The stock had surged 324% year-to-date before the market opened on Friday, October 17, 2025.
- The primary reason for the downgrade was cited as "excessive valuation," with shares trading at 34 times estimated 2027 sales.
- Despite the downgrade, the analyst's price target for the stock remains unchanged at $60 per share.
Details of the Analyst Action
The adjustment in rating came from Barclays analyst Mathieu Robilliard, who took the rare step of moving the stock's recommendation two levels down, from Buy to Sell. Typically, analysts adjust ratings one step at a time, for example from Buy to Hold, making this a significant signal to the market.
In response to the news, AST SpaceMobile's stock, trading under the ticker ASTS, fell 2.3% in early trading on Friday to $87.43 per share. This movement contrasted with the broader market, where the S&P 500 index was down 0.1% and the Dow Jones Industrial Average showed a slight gain of 0.2%.
Understanding Stock Ratings
Analyst ratings provide guidance to investors. A "Buy" rating suggests the stock is expected to outperform the market, a "Hold" suggests it will perform in line with the market, and a "Sell" rating indicates an expectation of underperformance. A double downgrade from Buy to Sell is a strong statement of concern from an analyst.
Valuation Concerns Amid Rapid Growth
The core of the downgrade centers on the company's valuation. According to Robilliard's report, while the market opportunity for satellite direct-to-device data is substantial, the company's stock price has become disconnected from its near-term financial reality.
"Valuation, however, has become excessive in our view," Robilliard stated in the note to investors. He acknowledged the company's strengths, writing that the sector "will prove to be a very attractive opportunity, and AST has key assets to succeed."
The stock's performance leading up to the downgrade was remarkable. Over the past six months, its value increased by 283%, and it has risen 324% since the beginning of the year. This rapid appreciation has pushed its valuation to levels that are difficult to justify with current financial models.
By the Numbers: AST's Valuation
According to data from FactSet, AST SpaceMobile shares are trading at approximately 34 times the company's estimated sales for 2027. The company is not projected to achieve positive operating profit until that same year, making valuation assessments complex and reliant on long-term forecasts.
Price Target and Financial Models
Interestingly, Robilliard did not lower his price target, which remains at $60 per share. This suggests that his fundamental valuation of the company has not changed, but rather that the market price has significantly overshot that target. At the time of the downgrade, the stock was trading over 45% above this price target.
Valuing high-growth companies like AST SpaceMobile, which do not yet have positive earnings, often involves methods like a discounted cash flow (DCF) model. This approach projects future cash flows and discounts them back to the present day to estimate a company's current worth. Robilliard's $60 target is derived from such a model.
Broader Trends in the Space Sector
The surge in AST SpaceMobile's stock is part of a wider trend of investor enthusiasm for the commercial space industry. This interest has been fueled by a shift in government policy, particularly since the administration of former President Donald Trump, which has favored using commercial providers for services once handled exclusively by agencies like NASA.
This policy has created significant opportunities for new space companies. For example, Rocket Lab USA (RKLB), another company in the sector, has seen its stock increase by nearly 470% since November 5, 2024, demonstrating the market's strong appetite for space-related investments.
Wall Street's View on AST SpaceMobile
Following the Barclays downgrade, the consensus among analysts covering AST SpaceMobile has shifted. According to FactSet, 46% of analysts now rate the stock as a Buy. This is below the average Buy-rating ratio of approximately 55% for stocks listed in the S&P 500 index.
The average analyst price target for ASTS stock is approximately $55 per share. This consensus target is well below the stock's closing price on Thursday, indicating that many on Wall Street believe the stock is overvalued at its current levels. The recent performance of space stocks has presented a challenge for analysts attempting to keep their valuations and ratings in line with rapid market movements.