AST SpaceMobile jumps over 10% on multiple factors; Is ASTS stock a smart buy?

AST SpaceMobile Inc (NASDAQ: ASTS) saw its share price increase by more than 10% when the stock market closed on Monday, November 7. 

Stock market participants acquired a total of 10,121 call options on AST SpaceMobile, making the company the center of some unusual options activity on Monday. Compared to the average volume of call options, which is 7,323, this is a 38% increase in volume.

AST, which is building the world’s first and only cellular broadband network in space, has released preliminary third-quarter results. It has $199.5 million in cash at the end of the quarter and expects operational costs of $41 million to $43 million for the quarter. 

It had incurred around $92 million in capitalized expenses as of September 30, mostly related to its BlueWalker 3 test satellite (BW3), which it put into orbit in September. The satellite is operating smoothly, according to AST, and the deployment of the phased array antenna is expected to be completed by November 10, which remains an important event to monitor.

ASTS stock chart and analysis

In the last month, ASTS has been trading in the $5.86 – $7.79 range, and it is currently trading in the middle of this range, so some resistance may be found above. Mainly, a resistance zone from $7.56 to $7.65 is formed by multiple trend lines and important moving averages in various time frames.

On the other hand, support at $6.45 from a trend line in the weekly time frame and a support zone ranging from $6.32 to $6.33 is formed by a combination of multiple trend lines in the weekly time frame.

Despite the fact that ASTS is trading below its 50 and 200-day simple moving averages (SMA), the stock is currently trading above its 20-day SMA by 1.64% as a result of recent positive action. However, the short-term trend is neutral, while the long-term trend is still negative.

View on Wall Street

Numerous industry experts have provided their thoughts on the firm as of late. On Friday, October 28, B. Riley initiated coverage on AST SpaceMobile with a research note in which they assigned the company a “buy” rating and a $15.00 price target. 

The analysts at Deutsche Bank Aktiengesellschaft decreased their price objective on shares of AST SpaceMobile from $31.00 to $30.00. They gave the company a “buy” rating in a report published on Wednesday, August 17. 

TipRanks analysts rate the stock a ‘moderate buy,’ with price predictions for the next 12 months seeing a potential increase of 202.83% from the current trading price of $7.43 to a likely average price of $22.50 per share. 

The lowest price target is $15.00, more than double the current share price. Based on two  TipRanks analysts covering ASTS, both have a ‘buy’ rating over the last three months.

ASTS catalysts

The most recent earnings report provided by AST SpaceMobile was published on August 15. Earnings per share for the quarter were $0.06. The company’s total revenue for the period was calculated to be $7.26 million. At the same time, the return on equity for AST SpaceMobile was negative at 15.52%, while the company’s net margin was also negative at 68.97%. 

While the stock has fallen by over half from its August highs, short interest in AST remains very high at 29%, suggesting that ‘diamond hand’ traders may have already seen the beginnings of a short squeeze. 

AST, which has not yet turned a profit, has seen its top line increase from $1.41 million in 2019 to $12.41 million in 2021.   Furthermore, analysts anticipate that the amount will increase to $13.6 million in 2022. 

Amidst all this commotion, AST’s financial results for the third quarter will be released on November 14, along with the most recent report on the company’s operations.

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