If you’re a tech junkie, one of your favorite days of the year is the Apple keynote conference. And for good reason – there’s always something innovative and jaw-dropping released in the September event. And if you’re invested in Globalstar, this year’s conference was particularly interesting.
This year, the tech giant released the new iPhone 14’s ability to connect to satellites when not in the traditional cell service range. This will be a huge safety feature that allows users to access emergency services they otherwise wouldn’t be able to reach. While the service will be free for the first two years, there’s no telling what Apple will charge once that trial is up. But – we’re not here to talk about what the latest keynote conference could do for Apple stock today – at least, not directly. We’re here to talk about Globalstar – the company Apple intends to partner with for this new satellite feature.
Globalstar (GSAT) offers mobile satellite services – including voice and data communications – for the Government, public safety purposes, maritime and fishing, and a wide range of other use-cases. But, without the Apple partnership, there’s really nothing to write home about. Globalstar is down 30% in the past year – with a huge dropoff after the Apple keynote event last September where investors were disappointed to hear nothing about the rumored partnership. But with Apple’s keynote conference looming over the past 3 months, the potential for this partnership drove share prices up 55%.
And then, it happened. Apple and Globalstar made the deal official at the conference on September 7. This pushed the stock up almost 13% in just a day up to $2.43. However, the rally was short-lived. Within 36 hours, the stock slid back down below its previous point to just $1.65. Why? Because while the partnership with Apple is great news, there’s no telling how it will actually work out. The cost Globalstar faces to build additional satellites and infrastructure for Apple will be huge. And while they will definitely earn revenue from the Apple deal, analysts and investors alike are skeptical that this endeavor will be profitable for GSAT. Remember – this service is free to new Apple users, after all.
This morning, GSAT appears to be making another run – up over 11% since the market opened. Is now the time to close out your position and take whatever profits you’ve realized – or even cut losses? Or, should you continue holding your position and see what manifests from this deal? Looking at GSAT purely from a stock analysis standpoint, we can see a few things that investors should take heed of.
What VectorVest’s Stock Forecasting Tools Show in Regards to GSAT
VectorVest stock analysis tools simplify investing by boiling down all technical and fundamental analysis into three simple ratings, placed on an easy-to-understand scale of 0.00-2.00. These are Relative Value (RV), Relative Safety (RS), and Relative Timing (RT). These make up the overall VST rating a stock is given – and deem whether our system rates any stock a buy, sell, or hold. Let’s dig into what’s going on with Globalstar stock today:
- Very poor upside potential: Despite all this news, VectorVest calculates GSAT’s true value to be $0.16 – compared to its price of $1.89/share. The stock has very poor upside potential with an RV rating of just 0.21, suggesting low price appreciation potential over the next three years.
- Poor Safety: The VectorVest RS rating is computed by analyzing the consistency & predictability of a stock’s financial performance. It also factors in business longevity, debt-to-equity ratio, and other risk indicators. And when it comes to GSAT, our system rates it poorly with an RS rating of just 0.69 – below the average of 1.00.
- Good Timing: The one thing GSAT has going for it right now is a positive price trend. The RT rating calculates the direction, dynamics, and magnitude of a stock’s price movement. As you can imagine, this news and the investor sentiment that comes with it is pushing GSAT’s price up in the short term – leading to an RT rating of 1.17. But how long will this last?
All this considered GSAT has an overall VST rating of 0.83. If you’d like to make a confident, emotionless decision about your next steps with this stock – with no guesswork at all – analyze the stock free here. VectorVest will tell you whether you should buy, sell, or hold.
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for GSAT, it has very poor upside potential and poor safety, but good timing.
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