Space Exploration is a Bourgeoning Industry, these Three Space Company Stocks are the Ones to Watch.
Space Exploration Provides a Unique Opportunity for Investors
Space. It’s big. Really big. And it’s quite a big topic on Wall Street too.
Public interest in space exploration soared recently due to major developments occurring on both the public and private sides of the industry.
After last sending an astronaut to the moon in December 1972 as part of the Apollo 17 mission, NASA is planning again to hit the lunar surface.
Earlier this year NASA announced the names of the astronauts that will be part of the Artemis II mission. In 2024, the four astronauts will embark via NASA's Orion spacecraft for a crewed test flight, with the eventual goal of establishing a long-term presence on the moon for further scientific research.
Then you have SpaceX, led by billionaire Elon Musk, which has gained worldwide attention for a series of historic milestones. The rocket manufacturing company has completed 60 launches this year, much to the CEO’s excitement.
In August SpaceX’s Falcon 9 rocket launched 22 Starlink satellites to low-Earth orbit from Florida, marking the company’s 60th launch this year. “Congrats to the SpaceX team on launch 60 of 2023!” Musk wrote.
SpaceX is perhaps the most successful of the next-generation space start-ups and has numerous government contracts.
Despite geopolitical tensions and the Ukrainian conflict, investment in the space sector has rapidly increased since 2020.
Morgan Stanley believes space could be a $1 trillion industry by 2040.
The SmallSat sector (spacecraft weighing under 500 kg) is poised for substantial growth in capabilities and demand in the coming decade.
In the period 2012 to 2021 there were just 466 smaller satellites per year launched into orbit. Euroconsult forecasts that in the decade from 2022 to 2031 the expected number jumps to 1,846 per year!
Artificial intelligence is disrupting many industries including space.
AI-controlled satellites have the potential to enhance satellite autonomy and safety, making them more self-sufficient and reducing the risk of collisions with other spacecraft. AI is also used in Mars rovers to enable autonomous navigation and decision-making due to the long transmission delays between Mars and Earth
Savvy investors are searching for how to capitalize on the renewed interest in all things space. There are established defense titans, narrowly focused start-ups, and ones transporting things and people into orbit. The potential
While investors can't invest in SpaceX, or even Nasa, there are other options for capitalizing on the 21st-century space race. Here are three pubic companies in the space industry:
#1 Sidus Space (NASDAQ: SIDU)
SIDU is a satellite manufacturing and data-as-a-service space company. Sidus Space describes itself as a gateway to affordable and customized space solutions.
The cutting-edge manufacturing hub has over a decade of expertise in commercial, military, and government sectors. Housed in a 35,000 sq. ft facility at Florida's Space Coast, the company is AS9100 Aerospace Certified and compliant with ITAR, ITU, and FCC regulations.
Its innovation thrives with 10+ patents, including pioneering 3D printed satellite design, alongside exclusive data analytics solutions forged through strategic alliances.
A key reason NASDAQ-traded Sidus Space pops out as a notable contender in the space arena is this company has pioneered for over a decade and is already scheduled for orbit with Elon’s, SpaceX.
Sidus Space has contributed to the forefront of space exploration by being contracted for an exceptional 10 satellite launches with the globally renowned SpaceX company.
In fact, Sidus Space plans to reallocate two AI-driven Lizzie Sats to launch on an upcoming Bandwagon mission with SpaceX. The updated LizzieSat constellation configuration will advance cutting-edge Low Earth Orbit data collection and provide enhanced orbital flexibility for government and commercial customers.
The Sidus Space LizzieSat is a multi-mission satellite platform designed to provide turnkey access to space.
SIDU is taking advantage of the opportunity to cover more populated areas and increase data revenue with SpaceX. They are targeting first launch in Q1 2024 followed by two LizzieSats on a Bandwagon mission in Q2 2024.
“We made the decision to capitalize on SpaceX’s recent announcement to launch Bandwagon missions after evaluating the potential increased revenue opportunity tied to placing multiple LizzieSats in dissimilar orbits. This change will enable us to capture higher revenue generating data by covering more populated areas while also increasing our payload and data customers. We believe that, in combination with the inclusion of additional sensors and enhanced AI capabilities, the new orbits add value as we get closer to initiating these launches and developing new, high-margin business lines,” said Carol Craig, Founder and CEO.
Sidus Space is adding key technological advances to its capabilities, announcing AI capabilities through the Exo-Space acquisitions.
Exo-Space is a cutting-edge California-based firm specializing in Edge Artificial Intelligence (AI) software and hardware for space applications. This transaction signals Sidus's determination to tap into the growing AI sector and expand its offerings in the Earth and Space Observations services market.
Exo-Space brings a current revenue stream of commercial and government contracts extending through 2025, as well as a pipeline of potential clients. The deal is projected to have a positive impact on Sidus's earnings before interest, taxes, depreciation, and amortization (EBITDA).
Exo-Space occupies a unique niche in the realm of U.S. owned Edge AI computing, concentrating on both software and hardware solutions for space assets that utilize faster processing speeds. Exo-Space’s current operations complement Sidus’ established U.S. DoD/Intelligence relationships.
CAROL CRAIG
Founder and CEO of Sidus Space, said,
This transaction provides the opportunity for us to enhance our presence in the Earth and Space Observations markets by providing actionable solutions for our customers' needs as opposed to just raw data. The integration of Exo-Space EdgeAI technology with Sidus' sensors provides significant value and transformative potential across various domains.
With over a decade of trailblazing experience, Sidus Space prides itself for excelling in top-notch manufacturing for commercial, military, and governmental domains.
As the company leverages its space qualification history, established client connections, and the legacy of the International Space Station, the future looks bright for this underfollowed NASDAQ company.
#2 Gilat Satellite Networks Ltd. (NASDAQ: GILT)
Gilat Satellite Networks is a public company headquartered in Israel that develops and sells VSAT satellite ground stations and related equipment. Its shares are traded on the NASDAQ Global Select Market and on the Tel Aviv Stock Exchange
With over 35 years of experience, the company creates and delivers deep technology solutions for satellite, ground and new space connectivity and provides comprehensive end-to-end solutions and services, powered by its innovative technology.
Delivering high value solutions, its portfolio is comprised of a cloud-based platform and high performance satellite terminals designed to work in harmony with satellite constellations, including Very High Throughput Satellites (VHTS) and Software-Defined Satellites (SDS) in multiple orbits; high performance Satellite On-the-Move (SOTM) antennas; and highly efficient, high-power Solid State Power Amplifiers (SSPA) and Block Upconverters (BUC).
Trading at a few dollars a share, Gilat Satellite Networks Ltd. has seen its share price rise dramatically in the last few months.
Earlier this summer, the worldwide leader in satellite networking technology, solutions, and services, was awarded millions of dollars in orders for a cellular backhaul over a satellite project lead by a Mexican federal agency.
Gilat’s cellular backhaul solution is being used to connect hundreds of 4G sites within the “CFE Telecommunications and Internet for All” initiative (CFE Telecomunicaciones e Internet para Todos, also known as CFE TEIT) to provide better access to information and communication technologies for all people throughout Mexico.
Within this framework, global satellite and hub operators are working with Gilat, the world’s most experienced 4G cellular backhaul over satellite solution provider, to provide the best available solution. Gilat’s leading technology and local presence are proving instrumental in addressing the special requirements of the CFE TEIT deployment.
“Gilat believes in the right of all people to be connected, and we see the importance of internet connectivity continuing to grow among people throughout the world. Gilat’s cellular backhaul over satellite solution provides reliable, quickly deployable reach to remote areas and leads the way with a major share of the global market,” said Yossi Gal, Vice President of Regional Sales at Gilat. “We’re proud that our valued and long-time partners continue to recognize these advantages and have chosen Gilat for this important project in Mexico.”
More recently Gilat received a contract for satellite network modernization at Ethio Telecom of Ethiopia.
Gilat’s SkyEdge II-c with hundreds of Capricorn and Gemini VSATs will be used to enable enhanced satellite-based 4G cellular backhaul capabilities and enterprise communications for remote regions of the country.
The company’s positive developments could continue to be a catalyst to drive further growth.
Gilat has comprehensive solutions that support multiple applications with a full portfolio of products to address key applications including broadband access, mobility, cellular backhaul, military, government, and enterprise. It may be one exciting space stock to not dismiss.
#3 Iridium Communications (NASDAQ: IRDM)
Iridium Communications Inc. is a publicly traded American company headquartered in McLean, Virginia, United States. It operates the Iridium satellite constellation, a system of 75 satellites: 66 are active satellites and the remaining nine function as in-orbit spares.
As of July 6, 2023, the average one-year price target for Iridium Communications was 67.12. The forecasts range from a low of 45.45 to a high of $79.80. Shares are currently just under $50.
Iridium is the only satellite communications company that offers dedicated commercial global voice and data communications. Iridium provides weather-resilient L-band connectivity and global coverage compared to geostationary systems by leveraging its Low-Earth-Orbit satellite network.
The company shares a strategic relationship with various government organizations, including military and disaster response agencies and non-governmental organizations, to provide robust, tactical, real-time voice and low-latency data command and control communications on a regular basis. The company expects U.S. government business to produce revenues of $106 million in 2023.
In July, the company unveiled its latest offering — the Iridium Certus aviation commercial service. This service ensures a secure cockpit domain with reliable voice and data capabilities. This marks a significant achievement as it brings Iridium Connected aviation solutions to commercial transport aircraft, business aviation, and Uncrewed Aircraft.
It was additionally in July that the company reported financial results for the second quarter of 2023 and reiterated its full-year 2023 outlook. Net loss was $30.7M or $0.24 per diluted share. This was compared to a net income of $4.6M, or $0.04 per diluted share for the year ago quarter.
The net loss was primarily the result of the write-off of Iridium's remaining ground spare satellite following the successful launch of five of its six ground spare satellites in May. This charge offset the benefits of strong revenue growth in Iridium's Commercial Service lines and an increase in Engineering and Support revenue.
Iridium reported second-quarter total revenue of $193.1M, which consisted of $145.1M of service revenue and $48.0M of revenue related to equipment sales and engineering and support projects. Total revenue increased 10% versus the comparable period of 2022, while service revenue grew 9% from the year-ago period.
"We had another great quarter of double-digit growth in subscribers and commercial service revenue, which drove record operational EBITDA," said Matt Desch, CEO, of Iridium. Desch added, "Iridium's strong cash flow continues to support ongoing business investment and the return of capital to our shareholders."
The company reiterated its full-year 2023 outlook: Total service revenue growth between 9% and 11% for full-year 2023. Total service revenue for 2022 was $534.7 million.
IRDM recently secured a five-year contract, which is extendable for an additional five-year contract from the U.S. Space Force. The contract is aimed at further enhancing the U.S. Department of Defense (“DoD”) SATCOM portfolio.
This contract falls under the category of Indefinite Delivery, Indefinite Quantity, which is part of the U.S. Proliferated Low Earth Orbit Satellite-Based Services award and involves collaboration with various Iridium partners.
There may be promising gains ahead for this space company, which says on its website that it's "the only satellite communications provider that works anywhere on the planet."
In summary…
Investing in space stocks can give investors access to cutting-edge innovations and big growth potential.
According to a report by consulting firm McKinsey & Co., the space market has grown to $447 billion today, up from $280 billion in 2010.
According to several Wall Street analysts, companies in the arena offer investors a high-risk/high-reward opportunity, with significant potential returns.
Much larger companies have already been working heavily on providing products and logistics support in the space exploration industry. But the companies above also offer numerous services that could quickly get them more recognized on Wall Street!
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