The recent financial results of space exploration company Intuitive Machines (LUNR) are spurring investors’ interest. The company’s Q3 earnings report showed a 359% year-over-year revenue increase, with a $116.9 million contract from NASA. The company boasts a substantial space system and infrastructure portfolio, focusing on lunar exploration and resource utilization. The stock is up 371% year-to-date, and the company’s recent achievements, in conjunction with the current political climate surrounding space stocks, position it for a continued upward trajectory.
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Intuitive Machines Is Making Impressive Strides
Intuitive Machines designs, manufactures and operates space products and services. Its key offerings enable scientific and human exploration of the moon and the utilization of lunar resources to support long-term human residency on the lunar surface. Intuitive Machines caters to a broad range of clients, including the U.S. government, commercial entities, and international customers.
The company continued to make impressive strides in the third quarter. It was awarded a $116.9 million contract through NASA’s Commercial Lunar Payload Services (CLPS) initiative, marking its fourth contract. In addition, the company secured the sole Near Space Network (NSN) data services contract from NASA, potentially valued at up to $4.82 billion.
Moreover, key milestones were achieved in ongoing projects – the hot fire test for the propulsion system of its second lunar mission’s vehicle was completed successfully, setting the stage for a planned Q1 launch from the Kennedy Space Center. These achievements have positioned the company to capture more operational services, which are expected to provide lasting revenues with higher margins.
Intuitive Machines’ Recent Financial Result
The company recently reported results for the third quarter. Revenue of $58.5 million showed a significant increase of 359% year-over-year. Moreover, the company greatly improved its profitability, achieving a positive gross margin of $4.1 million. However, earnings per share (EPS) were -$0.82.
As of the quarter’s end, the company reported a cash balance of $89.6 million, the highest in its history. Additionally, there was a record backlog of $316.2 million, primarily due to Intuitive Machines’ fourth NASA CLPS award. This high quarter-ending backlog is also a first in the company’s history. Meanwhile, the initial task orders for Near Space Network data services, valued at $150 million, aren’t included in the backlog yet.
For the full year of 2024, management expects revenue to fall between $215 – $235 million.
Is LUNR a Buy?
The stock has been on an upward trend, recently climbing over 126% in the past three months. It trades near the higher end of its 52-week price range of $2.09 – $14.90 and shows ongoing positive price momentum as it trades above all major moving averages.
Analysts following the company have been constructive on LUNR stock. For instance, firms like Roth MKM and Benchmark have increased their price targets on the shares, seeing them rise from $10 to $15 and $16, respectively, while maintaining their Buy ratings. This is driven by the better-than-expected Q3 revenue and the belief that Intuitive Machines is likely to secure more program wins and carry out more successful lunar missions in future quarters.
Intuitive Machines is rated a Strong Buy overall, based on the cumulative recommendations of 5 analysts. The average price target for LUNR stock is $14.70, representing a potential upside of 21.79% from current levels.
Bottom Line on LUNR
Intuitive Machines has had a banner year thus far, seeing explosive revenue growth from securing several meaningful contracts from NASA. Its range of offerings supporting lunar exploration and resource utilization, alongside its steady progress on ongoing projects, is paving the way for Intuitive Machines to capture more operational services and ensure robust revenue streams. This strong financial performance is exciting investors and has sent the stock soaring. It is an exciting opportunity for investors in the growing space services industry.
