Space Stocks Are Taking Off Thanks To Strong Revenue Growth, Upgrades, and Industry Optimism — But Can It Last?
Investors used to clamor for shares of space upstart SpaceX. But now, valued at over $200B, they’re on the lookout for the next big thing. Many hope one of the dozens of space companies that went public during the pandemic could be their next rocket ship.
We have liftoff: Since 2020, the number of satellites in space has quadrupled from ~2.5K to ~10K, with many more on the way. According to the FTC, there are over 50K satellite applications — and someone has to send all those satellites into space. Enter companies like SpaceX, Rocket Lab, and Intuitive Machines — the latter two having risen 31% and 121% year-to-date (YTD).
- Rocket Lab, often called “the next SpaceX,” saw its revenue rise 71% in the latest quarter to a record $106M, all from small satellite launches — with TD Cowen analyst Cai von Rumohr calling it an “overwhelming small launch leader.”
- Space robotics firm Intuitive Machines experienced a 130% boost from new satellite projects, while Starlink competitor AST SpaceMobile was upgraded thanks to a strong financial outlook.
The New Space Race
Like SpaceX, Rocket Lab reuses the lower segment of its rockets, significantly reducing costs — helping them win business from rivals like United Launch Alliance, a joint venture between Lockheed Martin and Boeing. As a result, sending a satellite to space has become cheaper — and so have the opportunities.
- In May, AT&T announced a new deal with AST SpaceMobile to launch a satellite internet service to rival SpaceX, sending soaring 600% this year.
- In January, Google and AT&T also invested $110M into AST, while Amazon was reportedly considering a service to compete with Starlink.
The rocket to the bottom: The space industry’s momentum is welcome news for the final frontier, but not all bets on the Space Age’s high-risk, high-reward rocket ship have taken off. Virgin Orbit filed for bankruptcy earlier this year, and Astra was taken private after losing 99% of its value. And the worst might not be over. Dish Network’s EchoStar is staring down bankruptcy, while Richard Branson’s Virgin Galactic could meet a similar fate after an 85% YTD decline. With increased competition, space stocks could remain volatile and risky for the foreseeable future — a warning for investors weighing whether to set foot on the industry’s launch pad.
