Is Globalstar a Winner in the Space Industry?

NYSE: GSAT | Globalstar, Inc.  News, Ratings, and Charts

GSAT – Globalstar’s (GSAT) shares have soared nearly 26% in price over the past three months due to the company’s establishment of several strategic partnerships and other operational advances. But will the stock be able to maintain its momentum given its poor fundamentals? Read on, let’s find out.

Globalstar, Inc. (GSAT - Get Rating) in Covington, La., offers mobile satellite services worldwide. The company’s primary markets include recreation and personal, government, public safety and disaster relief, oil and gas, marine and fishing, construction, utilities, transportation, natural resources, mining, and forestry. In addition, it has formed a strategic partnership with XCOM Labs to commercialize XCOM’s capacity-multiplying technology in conjunction with Globalstar’s Band n53 for 5G installations in the United States and other countries where GSAT holds terrestrial rights.

The stock is up 26.7% in price over the past three months on the back of several positive developments, including increasing investor interest across the space ecosystem, agreements inked with Nokia, the Port of Seattle, and Ceres Tag, and an increase in C-Band spectrum auction investment.

However, in January, Morgan Stanley analyst Simon Flannery downgraded the stock to Underweight from Equal-weight, citing uncertainty about “a spectrum monetization event.”

Here is what could shape GSAT’s performance in the near term:

Poor Bottom line Performance

GSAT’s total revenue increased 3.9% year-over-year to $34.48 million for the three months ended Dec. 31, 2021. However, its operating loss increased 3% from its year-ago value to $15.52 million. Its net loss grew 10.2% from the prior-year quarter to $23.96 million, while its loss per share came in at $0.01 over this period.

Stretched Valuation

In terms of forward Price/Sales, the stock is currently trading at 21.18x, which is 1255.3% higher than the 1.56x industry average. Also, its 23.95x forward EV/Sales is 958.5% higher than the 2.26x industry average. Furthermore, GSAT’s 10.50x forward Price/Book is 31.4% higher than the 2.50x industry average.

Poor Profitability

GSAT’s 0.15% trailing-12-months asset turnover ratio is 67.4% lower than the 0.45% industry average. Its $131.88 million trailing-12-months cash from operations is 56% lower than the  $299.40 million industry average. Also, its trailing-12-months ROA, net income margin, and ROC are negative 13.8%, 90.6%, and 5.6%, respectively.

Consensus Rating and Price Target Indicate Potential Downside

The one Wall Street analyst that rated GSAT rated it a Sell. The 12-month median price target of $1.03 indicates a 29.9% potential downside. The price targets range from a low of $1.03 to a high of $1.03.

POWR Ratings Reflect Uncertainty

GSAT has an overall D rating, which equates to a Sell in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. GSAT has an F grade Value. The company’s higher-than-industry valuation is consistent with the Value grade.

Among the 19 stocks in the F-rated Telecom – Domestic industry, GSAT is ranked #15.

Beyond what I have stated above, one can view GSAT ratings for Stability, Momentum, Growth, Quality, and Sentiment here.

Bottom Line

While GSAT’s recent strategic collaboration with Nokia and other operational advancements has garnered significant investor attention and caused the stock to skyrocket in price, investors could get concerned about GSAT’s prospects based on its poor fundamental performance and consensus ratings. Therefore, we believe the stock is best avoided now.

How Does Globalstar Inc. (GSAT) Stack Up Against its Peers?

While GSAT has an overall D rating, one might want to consider its industry peers, InterDigital Inc. (IDCC - Get Rating), which has an overall A (Strong Buy) rating, and Ooma Inc. (OOMA - Get Rating), which has an overall B (Buy) rating.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year

Top 10 Stocks for 2022

REVISED: 2022 Stock Market Outlook

7 SEVERELY Undervalued Stocks


GSAT shares fell $0.01 (-0.68%) in premarket trading Friday. Year-to-date, GSAT has gained 25.86%, versus a -4.22% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
GSATGet RatingGet RatingGet Rating
IDCCGet RatingGet RatingGet Rating
OOMAGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Market Update: It’s Complicated!

The S&P 500 (SPY) may have bounced 17% from recent lows, but the outlook for stocks from here is...in a word...COMPLICATED. Read on to get Steve Reitmeister full market outlook and trading plan for this complicated market environment.

Becoming More Bullish on Stocks, But...

Stocks are on a roll with the S&P 500 (SPY) up more than 10% from the recent lows. Before you start getting too giddy, you should read this updated market outlook and trading plan Steve Reitmeister.

Stock Market Held Hostage

Uncertainty is the term most often applied to this stock market. Uncertainty over tariffs. Uncertainty of whether the S&P 500 (SPY) will fall into bear territory. Uncertainty over what happens next. Steve Reitmeister dives into the uncertainty to make sense of the market in this week’s commentary...

Stock Market Standing on the 50 Yard Line

Steve Reitmeister contemplates where the stock market stands now and what happens next in trying to stay on the right side of the market action. One path points to bear and one to new highs for the S&P 500 (SPY). Which will it be?

Bear or Bull Market?

The S&P 500 is on the brink of bear market territory...but that outcome is not a given at this time. Steve Reitmeister shares insights gleaned from his 45 years of investing to shine a light on current conditions along with his top picks...

Read More Stories

More Globalstar, Inc. (GSAT) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All GSAT News