This small lunar exploration firm is anticipated to have a promising outlook.
Intuitive Machines, whose stock ticker is LUNR, saw its stock value more than double over the past year. The company, known for producing lunar landing and exploration vehicles, caught the attention of investors by achieving its first lunar landing, securing new NASA contracts, and expanding its ride-sharing service to transport additional third-party payloads to the moon. Analysts are exploring whether this upward trajectory might continue over the next 12 months.
Over the past two years, Intuitive Machines went public through a merger with a special purpose acquisition company (SPAC). The stock debuted at $10 before climbing to an all-time high of $81.99 shortly after. Initial investor enthusiasm was fueled by the announcement of three major NASA contracts, plans to launch the Nova-C lunar lander, and ambitious revenue forecasts. However, delays in the Nova-C launch and fewer contract acquisitions tempered excitement, alongside rising interest rates that deterred investment in SPAC-backed companies. By January 4, 2024, the stock had plummeted to an all-time low of $2.11. Nonetheless, a $1,000 investment at that low point would now be worth nearly $9,000.
The company’s stock surged following the successful lunar landing of its Nova-C lander, Odysseus, on February 22, 2024. This marked the first successful U.S. moon landing since 1972 and resulted in Intuitive Machines receiving four new NASA contracts, including a lunar terrain vehicle contract, a commercial lunar payload services contract, an exclusive near-space network contract, and a lunar logistics solutions contract. Consequently, in the third quarter of 2024, the company’s quarterly backlog reached a record $316 million, with expectations for annual revenue to increase from $80 million in 2023 to between $215 million and $235 million in 2024. Analysts predict revenue growth of 188% to $229 million for the year.
For the immediate future, a key development for Intuitive Machines is the delivery of Athena, its second lunar lander, to Cape Canaveral, Florida, as part of a NASA contract. A launch is tentatively scheduled within a four-day window opening on February 26, and a successful launch could further boost stock value. Additionally, a partnership with Columbia Sportswear, which is supplying specialized fabrics for the Athena lander, may attract other consumer-facing companies seeking similar brand visibility, potentially reducing costs through commercial partnerships.
As Intuitive Machines expands, it could secure additional contracts from NASA, other space agencies, and commercial customers, especially for its ride-sharing ventures. Should these opportunities materialize, analysts expect a 57% increase in revenue to $360 million by 2025, with positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Intuitive Machines currently holds an enterprise value of $1.8 billion, assessed at five times this year’s sales. Though share count has more than doubled in the past year to raise capital and cover expenses related to stock-based compensation and recent warrant redemptions, investor sentiment remains optimistic.
By the end of its latest quarter, the company reported holding nearly $90 million in cash and equivalents, with no debt. CEO Stephen Altemus highlighted the company’s “ample liquidity” to support their strategy for lunar commercialization during a recent conference call.
While Intuitive Machines is considered a speculative stock, its trajectory might ascend over the next year with successful landings of Athena and increased contract acquisition. Further, falling interest rates could enhance investor interest in this high-growth space sector stock.
