Following a much-hyped introduction, space stocks have admittedly stunk up the field. Nevertheless, the underlying sector is only growing in relevance. Recently, Japan’s efforts to land a lunar rover on the moon reflect the heightened global competition in the space race.
Fundamentally, this dynamic bodes well for the long haul. Some projections state that the economy for the final frontier may be worth $1 trillion by 2040. However, data from McKinsey & Company suggests that this threshold can be crossed 10 years sooner. Whatever the case, experts agree on one thing: the sector should experience robust growth.
Given the intense interest in the burgeoning ecosystem, speculators might treat the red ink as a buying opportunity. For potentially stratospheric gains, below are compelling space stocks to consider.
Rocket Lab (RKLB)
Based in Long Beach, California, Rocket Lab (NASDAQ:RKLB) is a multi-faceted name among space stocks, primarily focused on launch services. Mostly, media coverage centers on the Electron small orbital launch vehicle. In December, the company launched its tenth Electron for the year, surpassing its prior annual record of nine launches in 2022. Notably, the Electron represents the second-most frequently launched U.S. rocket annually.
Despite the many relevancies that Rocket Lab offers, RKLB only managed to gain less than 2% in the past year. Still, on the bright side, that leaves extra room for potential upside. At least, that’s the way analysts apparently see it. At the moment, experts rate RKLB a consensus strong buy with a $7.53 average price target, implying 55% growth. Further, the high-side target lands at $10, projecting nearly 106% upside.
To be sure, space stocks aren’t without risks. For Rocket Lab, investors would like to see its top line expand more following a noticeable deceleration in the trailing 12 months. Still, a dovish monetary policy pivot could be what the doctor ordered.
Planet Labs (PL)
A simultaneously compelling but risky idea among space stocks, Planet Labs (NYSE:PL) should be approached with maximum care. An Earth-imaging specialist, Planet Labs’ main goal is to image the entirety of our (planetary) home to monitor changes and pinpoint trends. Analysts view the endeavor as a worthy one, pegging shares a consensus strong buy with a $4.71 price target. If it lands, we’re talking upside potential of over 123%.
Even more enticing, Needham issued the high-side target of $7, which implies growth of nearly 232%. That would be something. Unfortunately, it’s a high-risk proposition. Since the beginning of this year, PL slipped more than 11%. In the trailing six months, it’s down almost 37%. And in the past 52 weeks, investors are staring at red ink signaling a market deterioration of 57%.
Will Planet Labs regain its mojo? You’d think that at some point, it could arrest its decline. From investigating North Korea to assessing Russia’s invasion of Ukraine to monitoring the situation in Southern Gaza, news agencies have relied on Planet Labs to provide critical visual data.
It’s worth a shot if you have some pocket change lying around.
Intuitive Machines (LUNR)
Headquartered in Houston, Texas – appropriately enough – Intuitive Machines (NASDAQ:LUNR) is a diversified space company. Primarily, it offers two business solutions: lunar access services (providing reliable and affordable landing services for payloads on the Moon’s surface) and lunar data services (processing and analyzing data collected from the Moon). One of the most intriguing space stocks, it’s also frustrating to read.
Since the start of the year, LUNR gained almost 11% of equity value. That seems quite auspicious. Unfortunately, in the past six months, shares fell 70%, which is an alarming figure. Nevertheless, analysts are shockingly hopeful, rating LUNR a unanimous strong buy. And this isn’t a case of a positive call that was abandoned amid a shock downturn. The most recent “buy” rating came from Canaccord Genuity on Jan. 11 of this year.
More than likely, Wall Street is willing to give LUNR a chance due to renewed interest in lunar missions. According to the European Space Agency, more than 400 missions are set to launch to the Moon between 2022 and 2032. Thus, patience could be a virtue with Intuitive Machines.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
