**Reaching for the Stars: Can Intuitive Machines Regain Its Momentum?**
Intuitive Machines, a lunar landing and exploration vehicle developer, went public in February 2023 through a merger with a special purpose acquisition company (SPAC). The company’s stock soared to a record high of $81.99 before plummeting to around $9. Despite the initial excitement, Intuitive Machines failed to meet its rosy projections, and its stock collapsed under the weight of rising interest rates and lofty valuations.
The company generates most of its revenue from NASA contracts, including a recent lunar terrain vehicle (LTV) contract awarded in April. Intuitive Machines is also exploring “ride-sharing” services for non-NASA clients. However, the company’s revenue growth has been sluggish, missing estimates by a significant margin. The successful Nova-C landing in February and the new LTV contract suggest NASA will strengthen its relationship with Intuitive Machines, but the company faces intense competition from established players like Lockheed Martin and emerging space-focused startups.
Despite the challenges, Intuitive Machines expects its revenue to surge 163% to 200% this year, driven by a growing contracted backlog. Analysts predict a compound annual growth rate (CAGR) of 82% to $480 million from 2023 to 2026. While the outlook is promising, it hinges on the company’s ability to fulfill existing orders, secure new contracts, and expand its ride-sharing business.
Intuitive Machines has paid off its outstanding debt but holds limited cash reserves, which may necessitate further debt or equity issuance to fund its growth plans. The company’s rapid share dilution since its public debut is a concern, and its stock remains volatile.
If Intuitive Machines meets analysts’ estimates and maintains its current valuation, its enterprise value could more than double to $1.2 billion by 2026. Further revenue growth could propel the company’s value to $1.6 billion or more. While the stock may not revisit its record highs, patient investors could still reap multibagger gains if Intuitive Machines expands its business successfully. However, the risks remain, and investors should exercise caution before buying into the company’s ambitious plans.
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