Globalstar stock sank as much as 20% on Friday after Morgan Stanley analysts argued the bull case is “largely priced in,” with the shares up 260% year-to-date.
The firm cut the Covington, Louisiana-based satellite communications company to underweight from equal weight in a note Friday morning, reiterating its price target of just $0.55. The stock ended Thursday’s session at $1.24.
Globalstar is a mobile satellite services provider that offers customizable satellite commercial IoT solutions, satellite connectivity for mobile and field personnel, fleet asset tracking, and equipment monitoring, and more.
Even though Globalstar trades just above penny-stock range, the company boasts a market cap of close to $2 billion and is featured in prominent ETFs like the iShares U.S. Telecommunications ETF and the Invesco RAFI Strategic US Small Company ETF.
Globalstar’s stock skyrocketed over the past year after the company was able to secure financing and announced multiple deals with the Finnish multinational telecommunications, IT, and consumer electronics company Nokia.
The deals gave investors hope that the firm would be able to monetize its constellation of low Earth orbit satellites.
However, Morgan Stanley argued there is considerable “uncertainty of a spectrum monetization event” and noted there might not be an imminent large-scale transaction.
Analysts said the stock’s valuation “looks full” and reflects “too much certainty of a transaction.”
Globalstar also reported a net loss of $24.9 million in its most recent quarter. And the company saw revenues fall 17% year-over-year to just $32.7 million, according to its SEC filings.
Shares of Globalstar traded at $1.07 on Friday morning, giving the company a $1.79 billion market cap.