Better Space Stock: AST SpaceMobile vs. Redwire
2026-07-22 16:20
•Brett Schafer •The Motley Fool
••• •• Axe Capital view
Redwire Looks Like the Safer Bet in the Space Race
Between AST SpaceMobile and Redwire, Redwire's financial track record and backlog make it a more grounded investment despite the hype around satellite internet.
AST SpaceMobile’s ambition to deliver direct-to-device satellite internet sounds exciting but comes with big risks. The company is burning cash at an eye-watering rate—over $1.3 billion negative free cash flow—and is behind on its satellite deployment targets. Plus, it relies heavily on SpaceX’s launches, while SpaceX itself is developing competing technology. Its valuation also seems wildly inflated, with a price-to-sales ratio of 187 despite minimal revenue. On the other hand, Redwire operates in both space and defense, showing improving margins and a solid $498 million order backlog. Its valuation is more reasonable at a price-to-sales ratio of 3.5, reflecting better fundamentals. Locally, this suggests caution for risky, high-burn tech plays, reinforced by how USD/ZAR tends to underprice future growth in uncertain environments. Redwire’s steady cash flow and government links mean it’s more likely to withstand market turbulence. this is just my opinion and not financial advice
I would avoid AST SpaceMobile for now due to cash burn and unrealistic valuations. Redwire is worth watching for its improving fundamentals and defense connections, but given the lack of direct JSE exposure, position through USD/ZAR plays or selective global equity exposure.
- USD/ZAR
- ASTS
- RDW
- AST may secure a breakthrough satellite technology or funding that changes its outlook.
- U.S. government defense cutbacks could reduce Redwire’s backlog and revenues.
5/10
Both AST SpaceMobile and Redwire have fallen over 50% from recent highs in the space sector downturn. AST SpaceMobile aims to build satellite internet with direct-to-device capabilities but faces significant cash burn ($1.37B negative free cash flow), launch delays, and SpaceX competition. Redwire operates diversified space and defense systems with improving financials, strong backlog ($498M), and better margins. Redwire trades at a more reasonable valuation (P/S of 3.5 vs. AST's 187) and is identified as the better investment choice.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Brett Schafer
Categories: Equities, Earnings, Financials
Tickers: ASTS, RDW
Sentiment: Mixed - Despite massive growth potential in satellite internet, the company faces severe headwinds: $1.37B negative free cash flow, significant cash burn trajectory, behind schedule on satellite deployment (10 of 45 planned by end of 2026), dependency on SpaceX for launches, SpaceX's competing direct-to-device technology, and extremely high valuation (P/S of 187) with near-zero revenue relative to $22B market cap. Redwire demonstrates stronger fundamentals with diversified revenue streams across defense and space sectors, improving financial metrics (gross margins expanding from 14.7% to 26.6%), strong backlog of $498M with 1.92x book-to-bill ratio, lower cash burn ($165M vs. AST's $1.37B), reasonable valuation (P/S of 3.5), and favorable tailwinds from increased U.S. Space Force budget and defense priorities.
Keywords: satellite internet, space economy, cash burn, valuation, defense spending, direct-to-device technology, backlog, gross margins
Insights:
- ASTS: Negative: Despite massive growth potential in satellite internet, the company faces severe headwinds: $1.37B negative free cash flow, significant cash burn trajectory, behind schedule on satellite deployment (10 of 45 planned by end of 2026), dependency on SpaceX for launches, SpaceX's competing direct-to-device technology, and extremely high valuation (P/S of 187) with near-zero revenue relative to $22B market cap.
- RDW: Positive: Redwire demonstrates stronger fundamentals with diversified revenue streams across defense and space sectors, improving financial metrics (gross margins expanding from 14.7% to 26.6%), strong backlog of $498M with 1.92x book-to-bill ratio, lower cash burn ($165M vs. AST's $1.37B), reasonable valuation (P/S of 3.5), and favorable tailwinds from increased U.S. Space Force budget and defense priorities.