Piper Sandler is an American multinational investment bank and financial services company, focused on mergers and acquisitions, financial restructuring, public offerings and public finance. It is advising its clients that AST SpaceMobile should be considered an ‘Overweight’ element in their portfolios. Piper Sandler’s research analysts have set $100 as a price target for AST.

The review by the bank is a first step in their initiation of the space market and which includes AST, SpaceX (target price $136.80) and Rocket Lab (price target $78.81).

The bank says that while it is hard to argue that either SpaceX or RocketLab are “cheap” in terms of their share price, the bank prefers AST due to “its more palatable valuation, and a clearer path to an EBITDA upside”.

The report reminds clients that AST builds satellites that communicate directly with smart-phones. As well as video calls, streaming and gaming, the company provides valuable functionality for Mobile Network Operators (MNO). Its strong partnership links could translate into a market of some 4 billion subscribers.

As for SpaceX the bank initiates its coverage a ‘Neutral’. The report admits that the emerging market for space-based services owes its existence to SpaceX, and the bank is comfortable underwriting the multi-year thesis for SpaceX. But the bank says there are some idiosyncratic near-term headwinds that it suspects will cap the firm’s upside. “In addition, we think it will be some time before the market is convinced that SpaceX can deliver on a truly game-changing approach to launching orbital data centers.

As for RocketLab, the bank also initiates its coverage as ‘Neutral’ but admits that the company is “inspiring” and praises founder Sir Peter Beck for having built RocketLab into the world’s best SpaceX alternative and its focus on an extreme vertical integration and “hardcore engineering”.

Meanwhile, an 8-K filing with the US Securities & Exchange Commission (SEC) last week saw AST admit a material delay to the launch of its service.

AST has frequently said it would have at least 45 satellites in orbit by the end of this year. Indeed, up until a few months ago it talked openly of having 45-60 satellites in orbit by year end.

Now the SEC filing says that the 45 initial satellites will not now be in place until “early 2027”. It has just 10 satellites in orbit at the moment, and delivery of more satellites into orbit has not been helped by the lack of rocket vehicles.

“The timing of launch of the BroadBand satellites is contingent on a number of factors including satisfactory and timely completion of the assembly and testing of the BroadBand satellites, readiness of the launch vehicle, logistics and other factors, many of which are beyond its control,” AST said.

AST faced a recent setback when a Blue Origin New Glenn vehicle deployed its satellite to the wrong orbit in April. AST had planned to use Blue Origin’s New Glenn to launch most if not all of the much-needed 45 craft. New Glenn is not expected to return to launching satellite much before the end of this year.

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Categories: Blogs, Business, Inside Satellite

Tags: AST, bank, spacex