Globalstar (NYSE:GSAT) is a penny stock in the telecommunications infrastructure sector that has been gaining attention. The company recently formed a strategic partnership with Apple (NASDAQ:AAPL) to enhance the iPhone’s satellite messaging capabilities through the latest iOS18 update. This move has attracted interest from large investors such as Jim Simons’ Renaissance Technologies and Israel Englander’s Millennium Management.
One of the significant shareholders in Globalstar is Director James Monroe, who recently acquired 4.51 million shares in the company, indicating strong insider buying and a bullish indicator. Trading at around $1.20, GSAT shares can experience significant volatility with small price movements, so investors should be prepared for fluctuations in the stock price. Despite the potential risks, the stock offers high-risk, high-reward opportunities for those willing to include it in their portfolio holdings.
Globalstar provides mobile satellite services globally, with a network of 24 low-Earth-orbit satellites and plans to add 17 more satellites in 2025 to improve coverage and performance. The company’s satellite connectivity powers iPhones, and Apple intends to expand this connectivity to regular text communications beyond cellular reach with the iOS 18 software release. This feature, often overlooked, could influence consumer decisions to upgrade their devices.
In terms of financial results, Globalstar recently reported revenue of $56.48 million for Q1 2024, surpassing analysts’ estimates and showing a year-over-year increase. The company experienced growth in service revenue due to a new agreement with a government services company and an increase in the subscriber base. However, this was offset by a decline in legacy service revenues and equipment sales revenue. Globalstar reported an operating loss of $4.7 million and a net loss of $13.2 million for the quarter.
Looking ahead, Globalstar anticipates total revenue for 2024 to range from $225 million to $250 million, with an estimated adjusted EBITDA margin of around 50%. The stock has demonstrated positive price momentum despite volatility, trading above its 20-day and 50-day moving averages. Analysts have been bullish on GSAT, with a price target of $4 set by Craig-Hallum analyst George Sutton, representing a potential upside of 214.96% from current levels.
In summary, Globalstar’s expansion of its satellite network and diverse range of products and services have led to strong first-quarter revenues and a positive outlook for the remainder of 2024. With potential revenue growth from partnerships with major tech companies like Apple, GSAT presents a high-risk, high-reward opportunity for investors. Despite potential volatility, the stock remains a compelling option for those willing to take on the risk.