AST SpaceMobile (NASDAQ:ASTS) & Ericsson (NASDAQ:ERIC) Critical Analysis

Ericsson (NASDAQ:ERIC) and AST SpaceMobile (NASDAQ:ASTS) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, dividends, earnings, risk and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ericsson and AST SpaceMobile, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ericsson	0	2	0	0	2.00
AST SpaceMobile	0	3	5	0	2.63

Ericsson currently has a consensus target price of $9.80, suggesting a potential upside of 28.78%. AST SpaceMobile has a consensus target price of $44.9857, suggesting a potential downside of 9.59%. Given Ericsson’s higher probable upside, equities research analysts plainly believe Ericsson is more favorable than AST SpaceMobile.

Institutional & Insider Ownership

8.0% of Ericsson shares are held by institutional investors. Comparatively, 61.0% of AST SpaceMobile shares are held by institutional investors. 41.8% of AST SpaceMobile shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Ericsson has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, AST SpaceMobile has a beta of 2.33, meaning that its share price is 133% more volatile than the S&P 500.

Valuation and Earnings

This table compares Ericsson and AST SpaceMobile”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ericsson	$23.45 billion	1.09	$1.89 million	$0.50	15.22
AST SpaceMobile	$4.42 million	3,563.02	-$300.08 million	($1.99)	-25.01

Ericsson has higher revenue and earnings than AST SpaceMobile. AST SpaceMobile is trading at a lower price-to-earnings ratio than Ericsson, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ericsson and AST SpaceMobile’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ericsson	7.06%	21.17%	6.64%
AST SpaceMobile	-7,213.90%	-32.12%	-19.79%

Summary

Ericsson beats AST SpaceMobile on 8 of the 14 factors compared between the two stocks.

About Ericsson

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.

About AST SpaceMobile

AST SpaceMobile, Inc., together with its subsidiaries, develops and provides access to a space-based cellular broadband network for smartphones in the United States. Its SpaceMobile service provides cellular broadband services to end-users who are out of terrestrial cellular coverage. The company was founded in 2017 and is headquartered in Midland, Texas.