Intuitive Machines, a Texas-based lunar company, has seen a surge in its stock price ahead of its IM-1 mission to the moon. The stock has climbed more than 300% since early January, reaching around $9 per share. Wall Street analysts attribute this rally to the excitement of retail investors regarding the company’s progress towards its goal of landing on the moon.
Analysts compare Intuitive Machines’ landing attempt to a biotech company awaiting FDA approval for a new drug, stating that it has a binary outcome. If the landing is successful, analysts believe the stock price could climb to around $15 per share. However, they caution that a last-minute mishap could negatively impact the stock.
Intuitive Machines went public less than a year ago and has spent most of that time trading below its debut pricing. The company is not widely covered by Wall Street analysts, but all four analysts who cover it have buy equivalent ratings on the stock. Despite the surge in stock price, analysts acknowledge that the current valuation is ahead of the company’s financials.
In addition to the financial and technological progress represented by the IM-1 mission, analysts note the enthusiasm surrounding what could be the first US landing on the moon in over 50 years, and the first by a corporate entity rather than a government agency. This excitement has captured the imagination and vision of investors, potentially benefiting the entire space industry.
Analysts believe that retail investors are driving the rally, with approximately 80% of trading over the past week being done by retail traders. The global news coverage of Intuitive’s mission is also seen as a driver, giving the company wider exposure.
IM-1 has been making steady progress through the milestones outlined before the launch. The company has already achieved more than 90% of the milestones required for payment under its $118 million contract with NASA. The remaining milestones include landing safely and successfully collecting data from the research on board the spacecraft. Analysts believe that the successful completion of these milestones will not only secure payment but also establish a track record of success, increasing the likelihood of winning future contracts.
Intuitive Machines is competing with other companies bidding to deliver cargo on future moon missions under NASA’s Commercial Lunar Payload Services (CLPS) program. The company’s progress thus far is seen as a key differentiator in future bids, even if the IM-1 mission is not successful in landing. Intuitive Machines already has two additional missions under contract and can apply the data and learnings from the current mission to future endeavors.
Overall, the surge in Intuitive Machines’ stock price is driven by retail investors’ excitement for the company’s progress towards landing on the moon. While there are risks involved, analysts believe that successful milestones and future contract opportunities position the company for further growth in the space industry.
