This Space Stock Has Gone to the Moon. It Caught a Rare Double Downgrade.

A computer rendering showing the sun-facing, solar cell-side of AST SpaceMobile’s BlueWalker 3 test satellite in low Earth orbit. (Courtesy AST Science)

Key Points

• AST SpaceMobile stock experienced a rare double downgrade from a Buy to a Sell rating by a Barclays analyst.
• Coming into Friday trading, AST stock had surged 56% over the past three months, 283% over the past six months, and 324% year to date.
• Despite the company’s potential in satellite direct-to-device data, valuation is considered excessive, with shares trading at 34 times estimated 2027 sales.

AST SpaceMobile stock has, well, gone to the moon. But now it’s falling back to Earth after catching a rare double downgrade on Wall Street.

Shares of the company developing space-based communications infrastructure fell 6.7% on Friday to $83.49, while the S&P 500 and Dow Jones Industrial Average gained about 0.5%.

Catalyzing the drop was a cut from Barclays analyst Mathieu Robilliard. He took his rating to Sell from Buy. That’s unusual: Wall Street typically moves one notch at a time, from Buy to Hold or from Hold to Sell, and vice versa.

He left his price target at $60 a share. That is also a little unusual, considering the ratings cut.

Recent stock performance helps investors understand what’s going on. Coming into Friday trading, AST stock had surged 56% over the past three months, 283% over the past six months, and 324% year to date.

Space stocks have become popular since President Donald Trump’s election. He is accelerating the shift toward using more commercial providers for things that NASA would once design and build itself. It’s creating more opportunities for space start-ups. Rocket Lab USA stock, for instance, has skyrocketed (pun intended) almost 470% since Nov. 5, 2024.

Satellite direct-to-device data “will prove to be a very attractive opportunity, and AST has key assets to succeed,” wrote Robilliard. “Valuation, however, has become excessive in our view.”

AST isn’t expected to generate positive operating profit until 2027. Shares trade for about 34 times estimated 2027 sales, according to FactSet. Valuing high-growth stocks without earnings can be hard. Robilliard, for his part, uses a discounted cash flow model to generate his target.

With the cut, 46% of analysts covering AST stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for AST stock is about $55 a share, well below where the stock closed on Thursday.

Wall Street has struggled to keep pace with space stocks lately.

Write to Al Root at allen.root@dowjones.com