Satellite communications specialist Globalstar (NYSEMKT:GSAT) has been a tough stock to love in recent years, with shares down more than 80% from mid-2017 through the end of last year. But the sentiment has changed for the better in 2021, and the shares climbed 11.3% in June, according to data provided by S&P Global Market Intelligence.
Globalstar is one of the original commercial satellite ventures, first launched in 1991 to provide high-speed space-based communications. The company has been through a lot of iterations, restructurings, and ownership shifts in the years since, but its business is still focused on selling capacity on its constellation of low-orbit satellites.
In recent months, the company has become popular with the Reddit WallStreetBets community, and in June, B. Riley analyst Mike Crawford chimed in with an opinion that the stock was indeed underappreciated. Crawford initiated covered with a buy rating and a $3.25 price target, saying the company “at long last” is starting to realize a return on its satellite and spectrum assets.
Crawford said now is a good time to buy in, before “the market digests this change” and warms to Globalstar shares.
Investors took heed. The shares had been down nearly 30% for the month prior to the B. Riley initiation but shot higher in the days that followed.
Globalstar shares are up nearly 400% year to date, but closed at $1.70 on Friday, still well below Crawford’s $3.25 price target.
This is still a niche business, and although it has arguably navigated through some of its most daunting challenges, it should be noted there are still risks involved. But given Wall Street’s renewed optimism, and the excitement it has caused, don’t be surprised to see this stock continue to be volatile in the months to come.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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