Why Intuitive Machines Stock Just Popped
Key Points
Cantor Fitzgerald analyst Andres Sheppard has reiterated his overweight rating and $32 price target on Intuitive Machines stock.
Intuitive Machines bought Lanteris earlier this year, and took over that company's contract building satellites for Sirius XM.
Intuitive Machines (NASDAQ: LUNR) stock soared more than 12% in late morning trading. With just half an hour till markets close, the stock is holding onto this gain.
And you can thank investment bank Cantor Fitzgerald for that.
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Cantor Fitzgerald loves Intuitive Machines stock
Cantor Fitzgerald analyst Andres Sheppard doubled down on his overweight rating and $32 price target on Intuitive Machines stock in a note covered on StreetInsider.com this morning.
The company recently delivered its latest IM-1300 series satellite -- SXM-11 -- to SiriusXM (NASDAQ: SIRI), says Sheppard. Actually, it was Lanteris that built these satellites -- as it's been doing for Sirius for the past two decades. But Intuitive bought Lanteris early this year in an $800 million transaction first announced last November.
That makes Intuitive Machines Sirius's largest satellite supplier.
What's next for Intuitive Machines
And not just Sirius's. Going forward, says Sheppard, "we expect LUNR to be better positioned as a Space Prime and to have the ability to design, manufacture, deliver, and operate missions from Earth orbit to the Moon and beyond."
Intuitive recently landed a separate contract to build missile defense satellites for L3Harris (NYSE: LHX) as a subcontractor under that company's contract with the U.S. Space Force, and more similar contracts are in the offing.
With an implied market capitalization of $3.2 billion, according to the latest data from S&P Global Market Intelligence, Intuitive Machines is not yet profitable and continues to burn cash. Analysts anticipate the company might begin generating positive free cash flow next year, however, and with $917 million in revenue expected this year, the stock is once again back in the 2-4x sales range where space stocks begin to look buyable.
It's not yet a screaming buy -- but it's worth a look.
Rich Smith has positions in Intuitive Machines. The Motley Fool has positions in and recommends Intuitive Machines and L3Harris Technologies. The Motley Fool has a disclosure policy.