Barclays maintains rating on AST SpaceMobile and Iridium; cuts Viasat

Barclays on Wednesday reiterated its "overweight" rating on AST SpaceMobile (NASDAQ:ASTS) and Iridium Communications (NASDAQ:IRDM), while lowering Viasat (NASDAQ:VSAT) to "underweight" from "equal weight."

Commenting on the current landscape of the industry, Barclays said legacy players will face challenges as they would have a higher cost of production, a higher latency, and maybe be unable to compete on "most promising" verticals, i.e., residential broadband and D2D. They expect them to lose market share and potentially revenues in the next decade.

They also expect satellite usage in regular households to account for more than 20% of the market in the long run and its technology to become a competitor to terrestrial operators in rural and semi-rural areas.

For Viasat, the research firm sees limited growth ahead. They pointed out that whilst the company will be adding more capacity, competition is rising, and new players would take a bite into the company's market share in most of its Communication Services business. 

On Iridium, Barclays said the company has a unique set of assets, notably the fully upgraded LEO L-Band satellite fleet, to compete in the low-bandwidth satellite data market. They believe Iridium can maintain a successful business in some verticals even with rising competition. They also highlighted that the company is generating substantial FCF growth and has a capex holiday until beyond 2030.

On AST SpaceMobile, the research firm said the company's proposition is unique, and the addressable market is very significant if it succeeds in extending mobile coverage everywhere via satellite with no need to change users’ mobile handsets. "If the technology scales as the company expects and execution follows on, the stock could be worth multiples of its current market valuation, in our view," Barclays said.