On Monday, Globalstar Inc. (NYSEAMERICAN:GSAT) shares spiked more than 55% on the news the iPhone 13 will have satellite connectivity. According to the reports, Apple’s latest model of the iPhone will use satellite to facilitate text and calls in areas without 4G and 5G coverage.
The iPhone 13 features a Qualcomm Inc. (NASDAQ:QCOM) X60 chip that supports satellite communications. Reports emerged in 2019 that the giant technology company has a “top-secret team” working on satellite technology for direct communications, allowing it to beam data to devices.
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It looks like things are getting closer to fruition after the latest developments. As a result, smaller 5G companies like GSAT could be poised to benefit significantly, thereby sparking a surge in their stock prices.
Should you invest in GSAT shares now?
From a valuation perspective, Globalstar shares trade at a steep price-sales ratio of 19.66 and a P/B of 6.22, making the stock less attractive to value investors. Moreover, analysts expect GSAT earnings per share to decline by 821% this year before rising at an average annual rate of 15% over the next five years.
Therefore, growth investors may opt for alternatives in the market. However, following the recent iPhone 13 news and the promising future of the 5G market, Globalstar could become a high-growth stock in the coming quarters.
Therefore, although the stock seems significantly overvalued, it may not be too late to buy, especially for investors targeting long-term buys.
Technical overview: Globalstar stock price forecast for Q3 2021
Technically, Globalstar shares seem to have recently spiked to created an upward price gap following Monday’s reports. As a result, GSAT has now spiked to overbought conditions of the 14-day RSI.
Therefore, investors can target extended gains at approximately $2.39 or higher at $2.79. However, if the stock pulls back amid hitting overbought conditions, it could find support at $1.67 or lower at $1.27.
Bottom line: the case for buying GSAT stock price bull run
Although a GSAT pullback looks inevitable, the stock is yet to retest this year’s highs, leaving room for more upward movement. Moreover, Monday’s news could boost long-term growth, making the stock attractive to growth investors.
As a result, investors can buy GSAT shares now after the stock eased in the afternoon session to trim the early morning gains.
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