Satellite communications company Globalstar (GSAT) stock has skyrocketed due to rumors that the iPhone 13 will be able to use satellite communications. The stock is up 51 percent over the last week and 540 percent so far in 2021. However, the stock is still down 27 percent from its 52-week highs. What's GSAT's stock price forecast and is it a good buy now?
On Sept. 2, GSAT stock surged 11 percent after receiving an additional advance payment of $37.5 million from a customer. The company will use the proceeds to repay the debt.
Globalstar and Apple partnership
According to TF International Securities analyst Ming-Chi Kuo, Apple's newest iPhones, expected out in September, will feature low-earth orbit satellite communications. Qualcomm's customized baseband chip would allow iPhone users to make calls and send texts without using their 4G or 5G cellular networks. According to Kuo, Globalstar is the logical satellite provider for Apple, thanks to its existing collaboration with Qualcomm. In February, Globalstar announced that its Band n53 technology would be integrated into Qualcomm's flagship 5G modem.
However, Bloomberg reported that the iPhone satellite features would be limited to emergency use only. It still isn't certain whether Apple will partner with Globalstar to provide emergency satcom service.
GSAT target price
According to CNN Business, analysts' median target price for GSAT stock is $1.90, which is 13 percent below its current price. In June, B. Riley analyst Mike Crawford initiated coverage of GSAT stock with a buy recommendation and target price of $3.25. The analyst said that GSAT is poised to start monetizing its 2.4 GHz S-band spectrum licensed in the U.S.
GSAT stock forecast 2025
GSAT offers mobile satellite services worldwide. The company owns 24 satellites in low-earth orbit. Globalstar is one of a growing number of firms focusing on a satellite network to deliver high-speed Internet and other services. A partnership with Apple would be a boon for Globalstar as it could drive the company’s revenue significantly higher and potentially help it attain long-term profitability. The global satellite communication market size was valued at $66.6 billion in 2020 and is expected to reach about $100 billion by 2025.
Globalstar faces competition from Elon Musk’s Starlink and AST SpaceMobile. In April, AST SpaceMobile went public through a reverse merger deal with New Providence Acquisition. ASTS is a pre-revenue firm whose commercial operations aren't scheduled to start until 2023.
How high can GSAT stock go?
It’s difficult to predict how high GSAT stock could go since the share price is impacted by investor sentiments. Among brokerages, GSAT’s highest target price is $3.25, which is 48 percent above its current price.
GSAT stock is a good buy
The demand for satellite devices is projected to rise, which bodes well for companies like Globalstar. GSAT stock is trading at a premium on the hopes that its satellite solutions would gain traction in the coming quarters. Overall, GSAT stock is a good bet on the projected surge in demand for its services.