Rocketing to a price of $51.32 during today's morning trading session, shares of AST SpaceMobile are still -28.24% below their average target price of $71.51. Could there be more upside potential for the stock? Analysts are giving ASTS an average rating of buy and target prices ranging from $43.0 to $95.0 dollars per share.
The market, on the other hand, is a bit more pessimistic. AST SpaceMobile's short interest -- meaning the percentage of its share float that is being shorted on an expectation of a price decline -- is quite high at 17.7%. The float includes only shares that are available for public trading, and excludes preferred shares.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
We can make inferences about the market sentiment surrounding AST SpaceMobile by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.
At 39.3%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.
In conclusion, we see mixed market sentiment regarding AST SpaceMobile because of an analyst consensus of strong upside potential, a buy rating, an unusually large proportion of its shares sold short, and only a small number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about ASTS:
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The stock has trailing 12 month earnings per share (EPS) of $-1.14
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AST SpaceMobile has a trailing 12 month Price to Earnings (P/E) ratio of -45.0 compared to the S&P 500 average of 29.3
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The company has a Price to Book (P/B) ratio of 11.25 in contrast to the S&P 500's average ratio of 4.74
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AST SpaceMobile is a Consumer Discretionary company, and the sector average P/E and P/B ratios are 20.93 and 2.93 respectively
