The United States has not been to the moon in over 50 years. All that changed on February 22 when Intuitive Machines (NASDAQ:LUNR) landed an uncrewed spacecraft near the lunar south pole. What SpaceX has done to commercialize the design, manufacture, and launch of advanced rockets and spacecraft, Intuitive Machines is doing for lunar landing and exploration. LUNR trades at a discount, but with plans to launch two more spacecraft on the moon for NASA in the next ten months, along with other potential contracts, it could quickly capture the investing public’s imagination, driving the share price substantially higher.
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To the Moon!
Intuitive Machines, led by former NASA employees, is a first-mover in the lunar commercial industry. As such, the company is uniquely positioned to continue receiving contracts from NASA and other entities interested in lunar payloads.
At the end of the previous year, the company had a backlog of approximately $270 million, and due to this backlog, substantial sales expansion is anticipated this year. Moreover, Intuitive Machines has started to generate revenue under a multi-year engineering services contract with NASA and anticipates three upcoming NASA contract awards.
A renewed space race is taking shape in the 21st century, with countries like China, India, Russia, and Japan making concerted efforts to assert their superiority in space exploration. Intuitive is well-positioned to capture a significant slice of the global market share of anticipated burgeoning lunar activity.
Intuitive’s Recent Financial Results
Intuitive Machines recently reported fourth-quarter results, with revenue landing at $30.6 million and beating the consensus expectation of $22.2 million. However, the top line declined 20% year-over-year. Further, net income fell from $12.4 million last year to $4.6 million.
Still, the company claims a strong financial position entering 2024, with a markedly improved cash balance of almost $55 million as of March 1, 2024 – the highest since the company’s initial public offering.
In the coming ten months, Intuitive Machine plans to perform two more lunar landings for NASA. This endeavor, coupled with other potential contracts, such as pending NASA awards to build an astronaut-capable moon rover, provide lunar data services, and additional moon mission contracts, is anticipated to increase the company’s revenue drastically.
What is the Target Price of LUNR Stock?
Shares of LUNR are trading around the middle of its 52-week price range of $2.09-$13.25, which appears to be a relative value. Also, the P/E ratio of 3.4x is way lower than the Aerospace and Defense industry average of 28.67x, and the enterprise-level EV/EBITDA of 14.63x sits below the industry average of 18.50x.
Analysts have been bullish on the company. For instance, Canaccord analyst Austin Moeller kept a Buy rating with a $14 price target, calling the company’s recent mission to the moon with the Odysseus lander a “major success.”
Intuitive Machines stock is rated a Strong Buy based on four Buys from Wall Street analysts who have published their outlook in the past three months. Their average price target for LUNR stock is $12.25, which represents a 98.86% upside from current levels.
LUNR In Summary
The resurgence of interest in space exploration and Intuitive Machines’ pioneering presence in the commercial lunar industry make a compelling argument for its potential growth. With a robust financial position, a healthy backlog of contracts, and upcoming projects with NASA, the company is poised to tap into the booming demand for lunar exploration.
The renewed interest in lunar activity and potential contracts it could fetch position the company well to see solid growth in the future. With shares currently trading at a discount, LUNR stock is an attractive option for investors looking for exposure to the rapidly growing aerospace industry.