Ascent Solar (ASTI) Declines: Why Bulls Don’t Mind

Ascent Solar Tech (NASDAQ: ASTI)

Ascent Solar isn’t having the best of days in the market today. Nonetheless, if you’re an ASTI bull, chances are that you don’t mind. Recently, ASTI has been on a dramatic run toward the top. Considering this, a slight downtrend simply isn’t an issue. Today, we’ll talk about why Ascent Solar climbed, why we’re seeing declines today and what we can expect to see moving forward. So, let’s get right to it…

Ascent Solar Lands A Big Contract

The reason for the gains we’ve seen in ASTI this week revolves around a large contract the company landed with regard to the Federal Government. Recently, we learned that Ascent Solar was granted the GSA Schedule 56 contract. This is huge news for the company because the Schedule 56 contract now means that Federal customers will easily be able to purchase ASTI products. These customers include Federal Agencies, all branches of the US Military and several more. As a result, investors are expecting that sales will rise, leading to higher revenue and positive earnings. In a recent statement, Rafael Gutierrez, Senior Vice President and COO at Ascent Solar had the following to say

Ascent’s GSA Schedule 56 contract unlocks a large and previously untapped potential revenue opportunity. The military applications for Ascent’s lightweight and durable solar products are numerous, particularly considering the MilPak platform, but there are a multitude of other applications for Ascent’s products ranging from disaster relief to use by the US Forest Services…”

As you can see from the statement above, the new contract is clearly good news for the company. The reality is that any government contract generally leads to big opportunities for the company the contract was granted to. Ultimately, the granting of the Schedule 56 contract is likely to pick up sales in a big way for ASTI.

Why Bulls Don’t Mind The Declines

ASTI has fallen 18.68% to $0.15 per share so far today (12:31). While this is an overwhelmingly drastic decline in the value of the stock, it’s something that the bulls really aren’t concerned with. That’s because of the massive increases in the value of the stock we’ve seen recently. In fact, yesterday, the stock climbed by more than 40%. One thing that’s important to remember here is the fact that the market tends to move through a series of overreactions. While the gains on ASTI were somewhat warranted, the massive movement that we saw yesterday was clearly an overreaction. As a result, we are seeing a correction in the stock that’s bringing it down to a more sustainable rate.

What We Can Expect To See Moving Forward

Moving forward, I have a strong bullish opinion of what we can expect to see from ASTI. The new government contract is incredibly positive for the company. Ultimately, there are several indications in which the Federal Government can use the lightweight solar systems created by Ascent Solar. This is likely to lead to increasing sales and positive earnings reports. As a result, we can expect to see gains on the stock in the long run.

What Do You Think?

Where do you think ASTI is headed and why? Let us know your opinion in the comments below!