Can You Invest In Intuitive Machines Stock?

The U.S. National Aeronautics and Space Administration is planning to send a crewed spacecraft to the moon for the first time in over 50 years. NASA is scheduled to send four astronauts on a 10-day mission on the Artemis II next year, though the project has seen its share of delays and cost overruns.

One of the main concerns in any space mission is communications, and NASA has awarded a $4.82 billion contract to Intuitive Machines (NASDAQ: LUNR) to build a network of lunar relay satellites that will provide communication and navigation services for Artemis II, and potentially for future missions.

So, can you invest in Intuitive Machines? The simply answer is yes, Intuitive Machines stock is publicly traded and can be purchased via any brokerage. 

For those who have already purchased, the LUNR share price performance has been outstanding. In September when news of the contract was released, LUNR skyrocketed by over 60% and the stock is now up almost 240% year-to-date. However, the stock is still not back to where it traded after Intuitive Machines went public through a SPAC transaction in early 2023.

Since then, the company has seen its revenue and earnings fluctuate as its contracts with NASA have not quite materialized as expected. However, Intuitive Machines now seems poised to steady the ship.

Why Is Intuitive Machines Stock Up So Much?

When the company reported its earnings results for the second quarter of 2024, Intuitive Machines’ revenue of $41.4 million was a 130% improvement over the same quarter of last year. The company’s revenue of $114.5 million for the first half of the year exceeded Intuitive Machines’ full-year revenue for 2023.

The space company’s current NASA projects include lunar terrain vehicles, omnibus mechanical engineering services, and its low-power nuclear satellites. The LTV project has been a particular driver, and Intuitive Machines was able to land its Nova-C lander on the moon earlier this year.

Even though that lander was originally planned to launch in 2021, NASA was pleased enough with the results that it awarded Intuitive Machines with a new LTV contract in April. The strengthened relationship with NASA means the company now has a contracted backlog of $213 million, up 55% from last year.

Intuitive Machines had net income of $15.2 million which is a 19.1% drop from last year. However, it is a vast improvement over the $121.6 million net loss the company took in Q1 24. Intuitive Machines has also paid off $8 million in debt over the past few months, and it has zero debt on the books.

The company ended Q2 with a cash balance of $31.6 million at the end of the second quarter, which it expects to be enough to fund the company’s operations through the next 12 months.

Intuitive Machines Revenue Model Is Genius

After the successful second quarter, Intuitive Machines’ leadership raised the low end of the company’s full-year 2024 revenue guidance. The company now expects revenue between $210 and $240 million, which translates to between 2.6 and 3 times 2023’s sales.

While Intuitive Machines had a solid Q2, the biggest news happened after the earnings results were delivered. The massive contract to provide communications between satellites in geosynchronous Earth orbit and the moon is estimated to bring in $150 million initially.

However, the majority of the multi-billion dollar contract will come after the satellites are launched and in operation. NASA will pay Intuitive Machines by the minute for the use of its network, and it is estimated that NASA will require a million minutes per year for its lunar operations. Still, it will take Intuitive 10 years to earn the full value of the contract, and so far the company only has a 5-year contract with the option to renew.

It’s still a massive revenue upgrade for the company, but, more importantly, Intuitive is building more trust with NASA, which has only grown after the company’s successful unmanned mission to the moon.

“This milestone validated Intuitive Machines’ lunar terrain vehicle and heavy cargo class lander design,” Intuitive Machines CEO Steve Altemus. “Intuitive Machines is unique among the competitors in the LTV bidding pool as we are the only competing prime contractor with demonstrated experience delivering to, transmitting data from, and autonomously operating on the surface of the Moon.”

How Do Analysts Rate Intuitive Machines?

After news of the company’s big contract, Wall Street analysts have begun to initiate coverage on LUNR. There are now six ratings on the stock and all of the analysts assess Intuitive Machines shares to be a buy.

The highest forecast for the stock is $12 per share, which corresponds to a 49.8% increase from where LUNR currently trades.

The average price forecast is $10.60 per share, which translates to a 32.3% increase over the next 12 months if it comes to fruition. The lowest forecast has LUNR rising 24.8% to $10 in the coming year.

Is Intuitive Machines Stock Undervalued?

All Wall Street analysts forecast that LUNR share price still has room to grow, even after the stock shot up on news of the contract. Given that the stock is still trading at just 1.9x sales, that seems like a reasonable assumption.

With that said, even though Intuitive Machines may be one of the few companies with lunar landing and communication experience, there is fierce competition in the aerospace industry. That comes from both established players like Lockheed Martin and newcomers like Blue Origin as well as Firefly.

Is Intuitive Machines Stock a Buy, Sell, or Hold?

Intuitive Machines is continuing to look for ways to leverage its lunar platform. The company also offers what it calls ridesharing services, where it delivers payloads to the moon for clients. Intuitive signed $18 million in rideshare delivery services in Q2 and it hopes to continue to drive that non-NASA revenue stream.

Still, NASA is the company’s largest and most important client, so it was a huge victory that Intuitive was able to lock up the contract for the upcoming mission. The steady revenue from the contract should put Intuitive Machines into a more stable place where it can continue to innovate.

There might still be some volatility with LUNR until the NASA revenue comes in, but the stock may very well be a rewarding play for investors willing to assume the risks.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.