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Why Intuitive Machines Stock Keeps Going to the Moon

Motley Fool - Fri Feb 23, 12:29PM CST

After surging in share price on news of a successful launch and trip toward the moon earlier this week, shares of tiny space stock Intuitive Machines (NASDAQ: LUNR) sold off in subsequent days. Investors held their breath and waited for word on whether the company's Nova-C lander would land successfully...or crash.

And now, the news is out. Nova-C has landed on the moon -- and Intuitive Machines stock is rocketing, up an astounding 25.8% as of noon ET.

Once more, with feeling

Intuitive Machines' first Nova-C lander, dubbed "Odysseus," blasted off atop a SpaceX Falcon 9 rocket just after midnight on Thursday last week. Almost precisely one week after its launch -- this Thursday evening -- Intuitive Machines was able to proudly announce:

In an update this morning, Intuitive Machines was further able to confirm that Odysseus landed safe, sound, and upright (in contrast to some failed landings by other countries in recent months); that its solar panels are charging; and that it's in contact with the company's mission control center in Houston.

In short, the mission is a 100% success -- America's first moon landing in more than half a century.

Is Intuitive Machines stock a buy?

Space stock Intuitive Machines isn't looking too shabby itself. Maybe not up 100%, but easily 25%. That seems a fair reward for the company that just returned America to the moon. The question now for investors is whether Intuitive Machines stock can continue to reward them with a higher and higher stock price.

It's not entirely clear that it can, but there's a chance. Here's how the math works.

Analysts polled by S&P Global Market Intelligence think Intuitive Machines -- which was profitable last year thanks, in large part, to the $118 million NASA paid it for Odysseus -- will turn unprofitable again in 2024. That's the bad news.

The good news is that Intuitive Machines is slated to launch as many as two more Nova-C landers to the moon this year (on missions dubbed IM-2 and IM-3, respectively). If those two contracts prove as lucrative as the first, analysts see the company pulling down revenues approaching $270 million this year -- which would mean Intuitive Machines is trading for a pretty cheap 1.1 times current-year sales.

Again, the forecast is for Intuitive Machines to lose money this year. But even if it does, a 1.1 price-to-sales valuation seems really cheap to me relative to a space company like Rocket Lab, for example, which is also losing money but sells for an incredible 9 times sales.

Call me an optimist, but I'm starting to think this little space stock could be a long-term winner.

Should you invest $1,000 in Intuitive Machines right now?

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Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.

Paid Post: Content produced by Motley Fool. The Globe and Mail was not involved, and material was not reviewed prior to publication.

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