ASTS NPV Sensitivity Analysis. Always good for a quality copium hit, which I'm sure we could all use right now.
Posted Jan 18, 2022, 9:03 PM UTC
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Some insider buying at these levels would be encouraging...
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I see that the last insider transaction was the CAO acquiring 200k shares in September, not open market. Can someone explain this? Does not open market just mean purchased from the company at a price other than market price? Or a grant?
Either way, would inspire some confidence to see insider buying
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Was thinking about that myself ….. Abel has already bet his net worth. That’s more than sufficient “alignment” for me.
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Have you got it in more than 144p, and I think it’s missing the top and side
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It's approximately 1400x850 currently on imgur, not sure why you're seeing it so much smaller 🤔
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Hmmm let me try on my desktop
Edit: works fine on desktop, Tim Cook clearly turning my phone to shit to get me to buy a new one
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Same looks bad on my iPhone too
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Yours and mine too!
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Note the highly restructured list of FCF achievement.
Highlights the significant revaluing of risk in this market.
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ELI5 what this is for the mortals?
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In business, we apply a discount rate (a percentage) to projected annual cash flows as one way of valuing a business.
The more risky the investment, the higher the discount rate is. This is because investors demand higher return for higher risk which is one of the fundamental concepts of investing.
Some people do a Net Present Value sensitivity analysis when making investments so that they can see what the return/value will be at varying discount rates versus varying levels of hitting their projected cash flows.
This lets one determine what the implied discount rate is.
For example, in OP's analysis, the market is currently pricing in ASTS to only reach 50% of their projected cash flows using a 50% annual discount rate from 2024-2030.
If you believe that that sounds very extreme and unlikely, then this is a buying opportunity.
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Essentially, the table is the market cap of ASTS, based on the very simple amount of cash they will generate by 2030, and a discount rate.
At a very high level, it's the present value of ASTS cash flows.
If you expect ASTS to make X dollars every year, what price should you pay to get a piece of them.
So you answer the following
A) how much can you return on your own
B) how much faith do you have in their ability to actually make the money.
If you can return 10% on your investment every year risk free, and you think they generate 30% of their projected cashflow, then you follow those two variables and you see what you should value ASTS today.
Notably, that 30% is a measure of your overall confidence. So that could be 30% chance they achieve 100% of their projections, or it could be 50% chance they achieve 60% of their projections.
It's not a perfect system but it has value imo.
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You’re missing the column headers for the table so doesn’t really make sense
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You can see them on desktop, but it’s cut off on mobile. Try on your computer.
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What column headers do you think should be there? This is my own sheet and there's nothing missing from it that I need to interpret
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[deleted]
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Can someone tell me what's the current market cap of ASTS? It's 1.18B on Tradingview and Marketwatch. OP's sheet takes 1.1B for its calculations. But afaik there's only 51.7m shares outstanding? (51.7 * 6,1 ~ 300M cap) What am I missing here? Thanks.
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The market cap is 1.1B
ASTS has 51.7M class A stock outstanding, but you need to also include class B and C in your calculations.
Class A = the public stock (NPA holders, incl. PIPE), one voting right per share
Class B = one right, pre despac equity holders
Class C = 10 rights, Abel
As far as I remember anyways. For future reference, see SEC filings / earnings reports.
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Sooo... How many shares in total?
I mean, OPs sheet is nice and all but we need to know the price per share.
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I just used the Google MCap midday yesterday. And the places reporting 51.7M are just wrong and only looking at I think Class A shares. It's been a consistent problem for a while.
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On mobile it cuts the image.
So this is cryptographers version of NPV sensitivity analysis. Did one of my own. I highly recommend you guys to try and comprehend it, instead of that simple question of what is the risk they fail / succeed.
A wise investing decision is not about just risk of failure / success.
A wise choice is also about the size of that success.
So this model does not only factor in risk but also the size of the reward.
Thanks, to you and u/cryptographer for your OP and the updated version. I’ve mentally gone back to the NPV analysis many times to silence the “external noise” and remind myself why I invested in the first place 👊