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3 Space Stocks Analysts Like Better Than Virgin Galactic

Barchart - Tue Apr 2, 8:51AM CDT

Investing in space stocks is a high-risk, high-reward strategy. In the last two decades, rapid advances in technology have attracted investments from private companies, providing investors with exposure to a sector once dominated by legacy government organizations. A Morgan Stanley (MS) report states that the global space industry could surpass $1 trillion by 2040, offering investors the opportunity to benefit from game-changing returns over time. 

One company operating in the space tourism segment is Virgin Galactic (SPCE). Valued at $572 million by market cap, Virgin Galactic stock is down 97% from all-time highs. Founded by Richard Branson, Virgin Galactic has trailed the broader markets by a wide margin in the last five years, as its attempts to begin commercial space tourism services have been delayed several times. Moreover, each space flight would cost an individual $600,000, making it an extremely niche market.  

Given the investment risks associated with Virgin Galactic, analysts are lukewarm are best on the equity's prospects, giving it a consensus rating of “Hold.” For investors seeking exposure to this high-risk growth industry, here are three other space stocks you can consider right now - all of which are “Buy”-rated by Wall Street experts.

Intuitive Machines Stock

A space exploration company, Intuitive Machines (LUNR) is valued at $811 million by market cap. In February 2024, Intuitive Machines launched a lunar lander called Odysseus to land on the moon. The soft landing was completed within the next two weeks, making Intuitive Machines the first U.S. company to land a spacecraft on Earth's natural satellite. 

In the next nine months, LUNR plans to launch and land two other spacecraft on the moon for NASA. Analysts expect Intuitive Machines to increase revenue from $79.5 million in 2023 to $277 million in 2024, with continued top-line growth to $386 million in 2025. 

Each of the four analysts covering LUNR stock has a “strong buy” recommendation. The mean target price for LUNR stock is $9.88, indicating an upside potential of 55.3% from current prices. 

www.barchart.com

Planet Labs Stock

Planet Labs (PL) provides daily data and insights about Earth. It offers a web-geo platform powered by data and analytics that simplifies the decision-making process for enterprises. The company announced its Q4 results last week, reporting record revenue of $58.9 million with adjusted losses of $0.11 per share

Comparatively, analysts were looking for revenue of $58.2 million and adjusted losses of $0.06 per share for Planet Labs. Its wider-than-expected loss dragged share prices lower by almost 12% yesterday, highlighting the volatility in these low-priced space stocks. 

Out of the 11 analysts covering PL stock, eight recommend “strong buy,” one recommends “moderate buy,” and two recommend “hold.” The average target price for PL stock is $5.17, indicating an upside potential of 137%. 

www.barchart.com

Rocket Lab Stock

The final space stock on my list is Rocket Lab (RKLB), a company that develops rocket launch and control systems for space and defense industries. It provides launch services to customers on a mission or ride-share basis. Moreover, Rocket Lab’s portfolio of services includes space engineering, program management, spacecraft manufacturing, and mission operations. 

Rocket Lab has launched 177 satellites to date and ended 2023 with a backlog of 40 other launches. Wall Street forecasts its sales to rise from $245 million in 2023 to $431 million in 2024, with continued growth to $641 million in 2025. 

Out of the 10 analysts covering Rocket Lab stock, nine recommend “strong buy,” and one recommends “hold”. The average target price for RKLB stock is $8, indicating an upside potential of 103%. 

www.barchart.com

On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Provided Content: Content provided by Barchart. The Globe and Mail was not involved, and material was not reviewed prior to publication.

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