As recently because the Nineteen Nineties, space exploration and travel were the exclusive domain of national or transnational governments. But lately private corporations have begun cutting into that governmental dominance – and their encroachment is opening up vistas of opportunity for risk-tolerant investors.
Some estimates put the eventual value – say, by the 2030s – of the private space industry at $1 trillion or more. Potential sectors that investors should watch are space tourism, satellite launching, geospatial imaging, solar energy generation, possibly even asteroid mining.
So, let’s take a have a look at two space stocks, potential winners at two very different ends of this arena. But for all their differences, each are considered Strong Buys on Wall Street, and each offer investors opportunity for triple-digit upside in the approaching 12 months, in response to TipRanks’ database.
Rocket Lab USA, Inc. (RKLB)
We’ll start with Rocket Lab, a firm working within the space-launch segment and a pacesetter in the event of reusable small-payload launch vehicles. This can be a high-potential area of interest, combining two major trends in orbital space travel – and Rocket Lab has taken a powerful position. The corporate’s Electron rocket, its flagship launch vehicle, is able to putting a 300 kilogram payload into low Earth orbit, and over the course of 32 launches has successfully deployed 152 satellites. Electron is currently the one reusable small launch vehicle in service, and Rocket Lab is working to complement its capabilities through development of the larger Neutron rocket – an ambitious program that may see a reusable rocket able to putting a 13,000 kilo payload into Earth orbit, or carrying 1,500 kilograms to Mars or Venus.
Rocket Lab has been launching its missions from its Latest Zealand facility, but starting this month it can also have the ability to launch Electron rockets from US soil. The corporate has scheduled its first US launch from a launch complex on the Virginia Space Mid-Atlantic Regional Spaceport of the NASA Wallops Flight Facility on January 23. The US launch site will facilitate Rocket Lab’s work with customers from the US, each government and industrial entities. Overall, Rocket Lab hit 9 successful launches in 2022, an organization record for one calendar 12 months.
The corporate’s revenues have been showing consistent quarter-over-quarter gains. Within the last reported quarter, 3Q22, the corporate showed a top line of $63.1 million, for a gain of 14% sequentially – and a powerful 1,093% year-over-year.
Covering this space launch firm for Morgan Stanley, analyst Kristine Liwag describes Rocket Lab as a ‘diamond within the rough,’ and writes: “We see opportunity available in the market’s indiscriminate treatment of Space corporations and think about RKLB’s recent price performance presenting attractive risk / reward proposition for an early space mover with real revenue, an increasingly visible growth profile and initiatives underway that might potentially upend traditional launch economics.”
“Furthermore,” the analyst added, “we expect satellite manufacturers’ reduced risk appetite in the present economic environment, together with recent setbacks to global launch capability, to offer tailwinds to RKLB given its relatively strong space heritage (2nd most launched US rocket). We proceed to view RKLB as a small launch standout with exciting potential as Neutron’s development progresses and management makes headway toward long-term profitability goals while upholding its execution track record.”
Liwag doesn’t just write up an optimistic outlook, he backs it with an Chubby (i.e. Buy) rating on RKLB shares and a $10 price goal that means a one-year upside potential of 101% from current levels. (To observe Liwag’s track record, click here)
While the Morgan Stanley outlook is bullish, the Street generally is much more so. Rocket Lab has 7 recent analyst reviews, with a 6 to 1 breakdown favoring Buys over Holds – and the $10.96 average price goal implies a 120% upside over the subsequent 12 months, from the present trading price of $4.97. (See RKLB stock forecast)
AST SpaceMobile, Inc. (ASTS)
The second space stock we’ll have a look at, AST SpaceMobile, is predicated in Midland, Texas, and like Rocket Lab is closely involved with the private satellite industry. But where Rocket Lab focuses on launch technology, AST focuses on the satellites – and what they’ll do. Specifically, the corporate is working on putting satellites into low Earth orbit to offer space-based cellular broadband networking. The corporate’s goal is to make space-based broadband into the worldwide standard.
AST has achieved plenty of necessary milestones over the past few months. Chief amongst those was the successful launch and deployment of the corporate’s BlueWalker 3 satellite. This can be a test platform for the technology, and can act as predecessor for the more ambitious constellation of 5 Block 1 Blue Bird satellites, tentatively set for launch before the tip of this 12 months. For now, BlueWalker 3 boasts the most important communications array every deployed on a industrial satellite in low Earth orbit.
In one other necessary milestone, one with a significant impact on mental property, AST had, as of November 14 of last 12 months, greater than 2,600 granted patents and patent claims pending. In fields as competitive as private satellite launch and broadband networking, the protection of proprietary tech is as necessary as successfully deploying that tech.
On the financial end, AST reported revenues of $4.17 million in 3Q22, and a gross profit of $1.64 million. These numbers compare favorably to the $2.45 million top line and $347K profit within the prior-year quarter. The corporate’s net loss per share got here to 18 cents.
Deutsche Bank analyst Bryan Kraft has been covering AST SpaceMobile for several years, and is impressed with what he sees. the corporate’s recent milestone achievements, he writes: “In our view, AST’s progress with BlueWalker 3 has substantially reduced the technical risks for the marketing strategy. AST’s first satellite was launched into orbit on September 10 and is currently testing various mechanical and technical elements for the system in space for the primary time. On November 14, AST confirmed that BW3’s array was successfully unfolded in low earth orbit, which represents a major testing milestone, in our view.”
“We remain bullish on AST SpaceMobile’s long-term business opportunity given the corporate’s large TAM, highly differentiated technology, partnerships with most of the world’s largest mobile network operators (MNOs), and attractive wholesale/revenue share business model,” Kraft summed up.
Kraft goes on to offer this stock a Buy rating, and a $32 price goal to point room for a shocking 516% share appreciation within the 12 months ahead. (To observe Kraft’s track record, click here)
AST SpaceMobile is admittedly still a highly speculative company – however it has picked up 3 recent analyst reviews and so they are all positive, making the Strong Buy consensus rating unanimous. Shares are trading for $5.19 and have a mean price goal of $20.67, suggesting a strong 298% upside on the one-year horizon. (See ASTS stock forecast)
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Disclaimer: The opinions expressed in this text are solely those of the featured analysts. The content is meant for use for informational purposes only. It is vitally necessary to do your personal evaluation before making any investment.