Key Points
Rocket Lab, AST SpaceMobile, and Viasat represent distinct opportunities to invest in the satellite industry without SpaceX’s high valuation. Each company offers unique positioning in satellite technology, though all face valuation or operational challenges.
1. Rocket Lab
Rocket Lab USA (NASDAQ:RKLB) operates the Electron rocket, the third-most-used orbital launch vehicle globally. Its satellite manufacturing segment now drives nearly 70% of revenue. The company is developing the Neutron rocket, a partially reusable system that could directly compete with SpaceX’s Falcon 9. While its price-to-sales ratio of 78 is elevated, Rocket Lab’s smaller scale allows for potential scalability if Neutron succeeds.
The bull case
Neutron’s development, if successful, could significantly expand Rocket Lab’s market reach and revenue streams. The rocket’s reusability may reduce launch costs and enhance competitiveness against SpaceX.
The bear case
Delays in Neutron’s launch timeline and execution risks pose challenges. Additionally, its high valuation relative to cash flow generation ($316.3 million free cash flow outflow in TTM) raises concerns about profitability timelines.
2. AST SpaceMobile
AST SpaceMobile (NASDAQ:ASTS) offers a satellite-based cellular network that provides 5G connectivity to smartphones without requiring specialized hardware. Its technology targets rural and underserved areas but has broader applications in dense urban environments. In 2026, its price-to-sales ratio stands at 234, reflecting optimism about long-term demand.
The bull case
AST’s satellite network could fill gaps in terrestrial coverage, particularly in remote regions. Strategic partnerships with carriers like AT&T and Verizon may accelerate adoption and validate its business model.
The bear case
The market size for AST’s service remains unclear, and its reliance on satellite deployment carries high operational costs. The extreme valuation requires sustained growth to justify the investment.
Image source: Getty Images.
3. Viasat
Viasat (NASDAQ:VSAT) generates most of its revenue from in-flight connectivity in aviation and growing defense contracts. Its price-to-sales ratio of 1.8 reflects relatively conservative valuations. The company holds a significant revenue backlog, particularly in government and military sectors.
The bull case
Expanding defense partnerships and improving its aviation connectivity business could drive revenue growth. Starlink’s technical limitations may further boost demand for Viasat’s services.
The bear case
High debt levels from past acquisitions ($6 billion net debt) and past satellite deployment failures (e.g., a damaged satellite in 2023) highlight operational risks. Interest payments continue to constrain cash flow despite strong revenue.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
