Intuitive Machines Inc. (NASDAQ: LUNR), saw its stock price surge by 50% today after the announcement of an innovative $5 billion space network with NASA.
This major deal signed on Wednesday represents a significant boost to the space exploration company, and highlights its growing importance in space missions.
Despite the impressive rally, potential buyers are left wondering if it’s too early to invest in the stock.
Intuitive Machines Stock: Profitability concerns
The new NASA contract, which has a five-year term with the option of an extension of five years, is a major endorsement for Intuitive Machines and its capabilities.
According to Cantor Fitzgerald’s Andres Sheppard analyst, the contract validates Cantor Fitzgerald’s outlook and its capability to secure additional contracts.
This positive news comes after Intuitive completed a successful moon mission earlier this year. The stock has risen by an impressive 150% in the past six week.
Despite the positive news, concerns over profitability are a major concern. Intuitive Machines’ stock is currently trading for approximately 3.5 times what it was at the start of 2024.
The company reported an operating loss of $28 million for the second quarter 2024. This was significantly higher than analysts’ expectations of a $9 million loss.
Profitability is not expected until 2026, with projections estimating that this year’s loss will be $68 million and an additional $10 in 2025.
Intuitive Machines also does not pay dividends, which makes it less attractive to income-focused investors.
LUNR share price may remain volatile
Analysts believe that Intuitive Machines will be able to continue operating for another 12 months with the cash they have at the end of their second quarter.
This could mean that the company may need to raise capital by selling stock, which could dilute existing shareholders’ stakes.
Wall Street analysts continue rating Intuitive as a “buy” with an average price target of $9.80. This suggests a possible further gain of around 10%.
The stock had previously traded at $11 following its first lunar mission, which took place in February. The new NASA contract will further support the company’s technological advances.
The risk tolerance of each individual will determine whether or not they invest in intuitive machines.
The recent surge in the stock and ongoing contract wins highlight its potential, but also come along with significant risks and volatility.
As a speculative asset, it can offer high returns but also pose substantial uncertainties in the future.
The post Intuitive machines stock soars by 50% on $5 billion NASA deal – Is it too late to invest in? This article may be updated as new information becomes available
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