Skyward: 3 Space Stocks That Are Better Buys Than SpaceX

Space Stocks to Buy - To The Skies: 3 Space Stocks That Are Better Buys Than SpaceX

SpaceX may be making headlines with its groundbreaking launches and ambitious plans to colonize Mars, but savvy investors know there are other space stocks to buy that offer significant returns. While Elon Musk’s project has captured the public imagination, he is not the only player in the booming space industry.

The global space economy is expected to exceed $1 trillion by 2040, according to Morgan Stanley. This growth is driven by an increase in satellite launches, space tourism and advances in space technology. High-speed satellite Internet access is expected to account for up to 70% of the projected expansion of the space economy by 2040.

As we look to the future, several companies stand out as undervalued gems with the potential to outperform SpaceX. Here are three space stocks to buy that deserve a spot on any investor’s radar. These stocks offer promising growth and innovation in an industry that’s literally reaching for the stars.

Rocket Laboratory (RKLB)

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Rocket Lab (NASDAQ:RKLB) is a leading aerospace manufacturer and provider of small satellite launch services. The company has significantly underperformed and is currently trading near its all-time lows. However, the company has the potential to grow significantly from current levels.

Rocket Lab’s future growth relies largely on its Neutron launch rocket. The medium-capacity Neutron is designed for a maximum payload capacity of approximately 13,000 kg and is designed for commercial and government constellation launches, with potential for human spaceflight. The company is aiming for its first launch by 2025, despite some skepticism about meeting that deadline.

During Rocket Lab’s first quarter 2024 earnings call, the company reported mixed results, reflecting significant progress and some challenges. Rocket Lab generated $92.8 million in revenue, a 69% year-over-year (YOY) increase. The company reported GAAP EPS of -$0.06, beating market expectations of $0.02. The company’s non-GAAP gross margin for the quarter was 31.7%. This exceeded market forecasts, indicating an improvement in operational efficiency.

Intuitive Machines (LUNR)

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Intuitive machines (NASDAQ:LUNR) is currently experiencing considerable growth in the space exploration sector. In 2023, Intuitive Machines successfully completed its first lunar mission, establishing its capability and paving the way for further missions planned for 2024 and 2025.

Following the success of its first lunar mission, the company plans to establish a regular schedule of lunar missions. Using SpaceX’s Falcon 9 rockets, Intuitive Machines aims to provide payload space for terrestrial and lunar deliveries.

Intuitive Machines has faced financial challenges, including negative equity, since its launch in 2020. However, recent balance sheet improvements, including a significant injection of cash from warrant exercises and strategic investments, strengthened the company’s financial position. The company expects revenue to reach between $200 million and $240 million in 2024, up from $80 million in 2023, driven by increased mission frequency and improved operational efficiency.

The company’s stock has significantly outperformed the market in 2024 and is up 131%. However, analysts remain optimistic and have an average price target of $11.5 for the stock. This presents a 111% upside potential in the short term.

Iridium Communications (IRDM)

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Iridium Communications (NASDAQ:IRDM) has recently emerged as an attractive opportunity in the satellite communications sector, thanks to its strong results and strategic growth initiatives. The company’s latest quarterly results showed robust revenue growth and an increase in subscribers, strengthening its leading position in satellite communications services.

Iridium reported earnings per share of $0.16 for the quarter, in line with analysts’ expectations. However, revenue of $203.85 million beat forecasts of $193.75 million. The higher-than-expected growth was driven by a significant increase in service revenues and an expanding subscriber base.

Iridium recently completed its first-ever acquisition on April 2. The acquisition of Satelles, now renamed Satellite Time and Location (STL), positions Iridium as a market leader in secure satellite time and location services. STL’s applications are crucial for GPS and GNSS systems, and its integration into Iridium’s portfolio, already supported by 500 global partners, extends the company’s reach to 5G base stations and data centers.

As of the date of publication, Mohammed Saqib did not hold (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to Publishing Guidelines.

Mohammed Saqib is a research analyst with experience in equity research and financial modeling. He has extensively covered listed stocks in the technology sector using fundamental analysis as a cornerstone of his approach. Currently pursuing a master’s degree in finance, Saqib is dedicated to obtaining the CFA charter to further increase his expertise in the field.

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