ASTS vs. IRDM: Which Satellite Connectivity Stock Should You Bet on?

A Zacks analysis compares AST SpaceMobile (ASTS) and Iridium Communications (IRDM), both satellite connectivity providers; ASTS has seen a 268% price surge in the past year versus IRDM's 14.6%, and forecasts a 1314.6% sales increase in 2025, while IRDM projects only 5.4% growth. However, IRDM's forward price-to-sales ratio is 3.57x, significantly lower than ASTS's 68.13x, and its EPS estimates are trending upward, suggesting Iridium is currently the more attractive investment despite ASTS's higher growth potential and past price appreciation.

Analysis

AST SpaceMobile (ASTS) and Iridium Communications (IRDM), both holding a Zacks Rank #3 (Hold), are prominent players in the satellite communications sector addressing connectivity gaps. ASTS has demonstrated remarkable recent share price appreciation, gaining 268% over the past year, and projects an extraordinary 1314.6% sales growth for 2025, driven by its novel direct-to-standard-smartphone LEO satellite network and deployment of its first five commercial satellites. However, this high-growth profile is accompanied by a steep valuation at 68.13 times forward sales and a projected 50% decline in EPS for 2025, with estimates trending downwards; the company also faces headwinds from unfavorable macroeconomic conditions increasing capital costs and intense competition requiring high operational expenditure. Conversely, Iridium Communications (IRDM) reported a 14.6% share price increase and forecasts a more moderate 5.4% sales growth for 2025, but with a 9.6% improvement in EPS, and its estimates are trending upwards. IRDM trades at a significantly more attractive valuation of 3.57 times forward sales, supported by its established 66-satellite LEO constellation, strong ties with the U.S. Department of Defense, and emerging revenue streams from IoT and its Satellite Time and Location business, projected to exceed $100 million annually by 2030. While IRDM also contends with competitive pressures leading to price wars and tariff impacts affecting margins, its historical steady revenue and EPS growth contrast with ASTS's more volatile financial trajectory, leading the source article to suggest IRDM as the relatively better-placed investment option at present.

Key Decisions for Investors

• Considering its more attractive valuation at 3.57x forward sales, positive EPS growth trends, and established operational track record, Iridium Communications (IRDM) currently appears to offer a more favorable risk-reward profile compared to AST SpaceMobile.
• Investors evaluating AST SpaceMobile (ASTS) should weigh its significant 1314.6% projected 2025 sales growth and disruptive technological potential against its high 68.13x forward sales multiple, a projected 50% EPS decline for 2025, and substantial execution, macroeconomic, and competitive risks.
• Continuous monitoring of capital expenditure, satellite deployment milestones for ASTS, margin pressures from intense competition for both companies, and the impact of tariffs on IRDM's profitability is essential for informed investment decisions in this dynamic sector.