1 Space Stock to Buy Before It Lifts Off 84%, Predicts Analyst

Shares of space exploration firm Intuitive Machines (NASDAQ:LUNR) may be plunging back to Earth, now down around 39% from their 52-week highs just north of $23 per share. But the company is headed to the moon again, with its second lunar lander to touch down on Thursday afternoon (or morning if you’re not on the east coast).

Undoubtedly, it’s an exciting time for space exploration and as one of the few space pure-plays on the public markets, investors looking to get a piece of the out-of-this-world action may wish to pursue the name. Despite the nearly 40% correction, shares of LUNR are still up close to 187% in the past year.

Indeed, it’s still a relatively heated $1.3 billion small-cap that could go either way over the near term. Even if you’re not a fan of the intense volatility or the speculative nature of space plays, you have to give credit where credit is due. Landing on the moon is no easy feat, especially if you’re not NASA.

Despite the choppy ride, some big-name analysts are sticking with the space stock despite the recent turbulence and needle-moving events up ahead.

The Street-high price target on LUNR stock is set at $26.

Just a few weeks ago, Canaccord Genuity analyst Austin Moeller reiterated his buy rating while hiking the price target to $26.00, up from $17.50. Such a hefty price target could suggest an 84% move from Wednesday’s closing price.

Why the big hike? The IM-2 Mission is a potential catalyst that could spark a drastic turn higher in shares. Indeed, if the firm finds evidence of frozen water (or anything else that’s remarkable) on the Moon, the implications could be considerable. Even if nothing extraordinary is discovered, a smooth landing could be enough to have a positive influence on Intuitive Machines’ oversold shares.

Furthermore, Moeller seems to be a big fan of a recent $4.82 billion near-space network service contract win, which could be the first of many as the firm expands its commercial presences, one that may one day power a push to profitability.

Of course, as is the case with most space stocks, investors had better be prepared for shares to succumb to the laws of gravity.

Some investors may be rushing for the escape pods (please forgive me for all of the puns!), but a few big-name analysts, such as Moeller, continue to believe in the name. As a stock that’s prone to moving sharply on the back of headlines, investors curious in the name had better fasten their seatbelts ahead of what’s sure to be a wild week for LUNR and the space plays.

Interest in space stocks could lift off.

As interest in public space plays picks up over the coming years and decades, investors with a high risk tolerance may wish to watch firms like Intuitive Machines. Though the business of space exploration isn’t exactly a profitable one quite yet, there is the hope that such smaller firms with great ambition can follow in the footsteps of SpaceX, which only recently achieved profitability. 

Could space really be profitable?

That’s the big question facing the broad basket of space plays. While Intuitive Machines may not be profitable, it’s growing fast, and its balance sheet looks to be in good order, with plenty of cash to invest in future projects. Indeed, the IM-2 Mission will see that the Athena lunar lander is poised to land within a matter of hours of the time of this writing.

After that, the IM-3 Mission will be a go this year while the IM-4 will follow in around two years from now. Undoubtedly, a lot hinged on these missions going smoothly. If they do, commercial missions may provide the company with an eventual path towards profitability. Indeed, given all the commercial opportunities in space (think satellite payloads and all the sort), I view LUNR as an intriguing albeit speculative growth play for investors.

Even innovation investor Cathie Wood is upbeat about the potential opportunity in space exploration and innovation. Her ARK Space Exploration & Innovation ETF (ARKX) is perhaps the most interesting of the batch.

At the time of writing, LUNR stock is one of the smallest positions of the ETF. If all goes well with the latest moon landing, perhaps it’s time for Cathie Wood to scoop up more shares. Personally, I’ll be enjoying the landing from the sidelines.

The post 1 Space Stock to Buy Before It Lifts Off 84%, Predicts Analyst appeared first on 24/7 Wall St..