Shares of AST SpaceMobile (NASDAQ:ASTS) dropped 6.8% in premarket trading on Wednesday after Scotiabank downgraded the satellite communications firm from Sector Perform to Sector Underperform.
The downgrade came from analyst Andres Coello, who also set a new price target of $45.60, pointing to valuation concerns and ongoing operational hurdles. At Tuesday’s closing price of $97.60, AST SpaceMobile’s market capitalization stood at roughly $37 billion, a level Coello described as “irrational levels.”
In explaining the downgrade, Coello highlighted several structural challenges facing the company, including the absence of retail customers and the scale of deployment required to reach continuous service. He noted that AST SpaceMobile would need to put around 50 satellites into orbit to deliver uninterrupted coverage in select markets by late 2026 or early 2027.
The analyst also cited signs of slower-than-expected user uptake in the U.S. and Japan, alongside relatively modest average revenue per user and heavy capital expenditure demands. Taken together, these factors suggest that meaningful free cash flow generation may not materialize until 2028 or 2029.
Competitive dynamics were another key concern. Coello emphasized pressure from Starlink, which has demonstrated a far greater ability to deploy satellites at scale. While AST SpaceMobile has launched only seven satellites since 2017, Starlink placed 3,169 satellites into orbit in 2025 alone.
Despite these challenges, Coello acknowledged AST SpaceMobile’s “highly disruptive” technology and its potential for dual-use applications. Even so, he argued that persistent execution delays and Starlink’s rapid expansion support a more conservative valuation range of $45 to $55 per share, well below current trading levels.