Globalstar Stock: 5G Penny Stock Has 250% Upside Potential in 2023

Globalstar Stock: 5G Penny Stock Has 250% Upside Potential in 2023

Why Outlook Is Bullish for GSAT Stock

Globalstar, Inc. (NYSEAMERICAN:GSAT) could be one of the biggest winners in the stock market this year. Globalstar stock finished 2022 up by 10%, which was far better than the performance of the S&P 500, which ended the year flirting with a bear market.

The outlook for GSAT stock in 2023 is even brighter, with analysts calling for shares of Globalstar, Inc. to rally between 148% and 254%.

Why the enthusiasm for Globalstar stock?

Despite stubbornly high inflation and fears of a recession, Globalstar, Inc., a provider of mobile satellite services, continues to announce new agreements, launch new products, and announce superb financial results.

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Moreover, management says it expects the company to keep increasing its revenues.

Chart courtesy of StockCharts.com

About Globalstar, Inc.

Globalstar is a leading global provider of mobile low-Earth orbit satellite and Internet-of-Things (IoT) connectivity services and terrestrial spectrum.

The company’s products include transmitters, tracking devices, GPS messengers, next-generation Internet of Things (IoT) products, and cloud-based telematics solutions. (Source: “NYC Investor Day – November 2022,” Globalstar, Inc., last accessed January 18, 2023.)

The company provides wireless communications services in areas that are unserved or underserved by terrestrial wireless and wireline networks, and where terrestrial networks aren’t operational due to natural or human-made disasters.

Globalstar, Inc. offers voice and data communication services over its network of in-orbit satellites and its active ground stations (gateways), which it refers to collectively as the “Globalstar System.”

The company’s services are only available with equipment designed to work on its network’s two-way voice communication and data transmissions, as well as one-way data transmissions. Its mobile and fixed devices transmit their location and other information to a central monitoring station.

Globalstar, Inc. currently serves the agriculture, commercial maritime, construction, energy, forestry, government, public safety, and transportation sectors.

The company’s top revenue-generating markets in the U.S. and Canada are government; oil and gas; personal telecommunications; public safety and disaster relief; and recreation. In recent years, the portion of Globalstar’s customers using commercial IoT devices has increased significantly.

Globalstar, Inc. currently has more than 750,000 subscribers. By 2026, that number is expected to top one million.

Some of Globalstar, Inc.’s customers are Apple Inc (NASDAQ:AAPL), BP plc (NYSE:BP), the National Oceanic and Atmospheric Administration, Shell plc (NYSE:SHEL), the U.S. Air Force, the U.S Army, and the U.S. Department of Homeland Security.

Because of Globalstar, Inc.’s diverse customer base, no single customer contributes more than 10% of the company’s revenue. 

Last November, the company forecast that its 2022 total revenue would be $145.0 million and that its 2026 total revenue would be in the range of $250.0 to $310 million.

“Transformational” Third Quarter

Globalstar, Inc. has a history of excellent financial results.

For the third quarter of 2022, the company announced that its revenues rose by 15% year-over-year to $37.6 million. That growth came from an increase in its service revenues, which were partially offset by a decrease in subscriber equipment sales (due to ongoing supply chain problems). (Source: “Globalstar Announces Third Quarter 2022 Results,” Globalstar, Inc., November 3, 2022.)

The company reported a third-quarter net loss of $204.4 million, or $0.11 per share. Globalstar, Inc.’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the third quarter of 2022 climbed by 35% year-over-year to $14.2 million.

The company ended the third quarter with cash and equivalents of $14.7 million.

David Kagan, Globalstar, Inc.’s CEO, commented, “The third quarter of 2022 was transformational for Globalstar.” (Source: Ibid.)

He added,

In addition to meaningful operational highlights that represent a series of successful milestones across wholesale services, terrestrial spectrum and product innovation, we continue to report strong financial results, including year-over-year revenue up 19% through the first nine months of 2022, and we look forward to continued growth from here.

(Source: Ibid.)

Analyst Take

Globalstar stock is an outstanding tech stock with tremendous near-term growth potential.

While 2022 was a tough year for many companies, Globalstar, Inc. reported tremendous results—including record EBITDA—all year. Furthermore, the company has been adding new customers and expanding its operations.

This has resulted in the company providing strong guidance for fiscal 2023, which includes revenue growth of at least 27%.