Over the past three years, many space-focused start-ups went public by merging with special purpose acquisition companies (SPACs). Some of those stocks initially soared, but most of them fizzled out as rising interest rates highlighted their ugly losses and popped their bubbly valuations.
Many of those SPAC-backed space companies also set overly ambitious growth targets, missed them by a mile, and struggled with severe delays and management issues. However, a handful of resilient companies survived that industrywide wash-out.
Let's see why three of those survivors -- Rocket Lab USA (NASDAQ: RKLB), Intuitive Machines (NASDAQ: LUNR), and AST SpaceMobile(NASDAQ: ASTS) -- are still worth buying right now.
Image source: Getty Images.
1. Rocket Lab USA
Rocket Lab produces partly reusable rockets for the National Aeronautics and Space Administration (NASA), the U.S. Space Force, the Swedish National Space Agency, Capella Space, and other big customers. Its main product, the Electron orbital rocket, can carry payloads of about 300 kilograms (around 660 pounds).
The Electron has been successfully launched 53 times over the past seven years. Its next rocket, the Neutron, is scheduled for launch next year with a maximum capacity of 15 metric tons.
Rocket Lab competes against SpaceX and other start-ups in the niche market for reusable rockets, but there could be plenty of room for all of these companies to flourish in this nascent market without trampling one another. It launched six Electron rockets in 2021, nine rockets in 2022, and 10 rockets in 2023. It launched another five rockets in the first half of 2024 and signed 17 new launch contracts.
Over the past year, the company won new launch contracts from NASA, the Internet of Things (IoT) connectivity provider Kinéis, and other space-focused customers. As it expands, analysts expect its revenue to achieve a compound annual growth rate (CAGR) of 54%, going from $245 million in 2023 to $887 million in 2026.
They also expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive by the final year. Rocket Lab's stock isn't a screaming bargain at 10 times next year's sales, but it could soar a lot higher over the next few years if it successfully scales up its business.
2. Intuitive Machines
Intuitive Machines develops lunar landing and exploration vehicles for NASA. It originally planned to launch its Nova-C lander in 2021, but that was repeatedly delayed. It also disappointed its investors by failing to win new stand-alone NASA contracts in 2022 and 2023.
But last February, NASA finally placed Intuitive Machines' first Nova-C lander on the moon, the first successful U.S. moon landing since 1972, and it encouraged NASA to award the company with two new contracts: a lunar terrain vehicle contract in April and an exclusive near-space network contract worth up to $4.8 billion in September. Intuitive also offered more "ride-sharing" services to deliver other payloads to the moon.
From 2023 to 2026, analysts expect it to increase revenue at a CAGR of 82%, from $80 million to $480 million. They also expect its adjusted EBITDA to turn positive in 2025 and jump more than ninefold to $42 million in 2026.
Based on those optimistic expectations, the stock looks dirt cheap at just slightly more than next year's sales. Intuitive Machines' long-term growth could be disrupted by delays and competition from other start-ups and aerospace companies, but it could still have plenty of upside potential as NASA ramps up its lunar exploration missions again.
3. AST SpaceMobile
AST SpaceMobile's low Earth orbit (LEO) satellites provide 2G, 4G, and 5G connectivity in areas that can't be reached by terrestrial tower networks. It signed space-based 5G contracts with AT&T and Verizon earlier this year, while its rival Starlink offers similar LEO services to T-Mobile.
The company launched its prototype BlueWalker 3 satellite in 2022, and five BlueBird Block 1 commercial satellites in September. In early 2025, it plans to launch its first four Block 2 satellites, which have approximately 10 times the data processing capacity of its Block 1 satellites.
It aims to eventually launch 17 Block 2 satellites as part of its long-term goal to build a massive constellation of 243 LEO satellites. However, that ambitious plan has only been partly approved by the U.S. Federal Communications Commission.
As AST scales up its business, analysts expect revenue to grow from $6 million in 2024 to $393 million in 2026 as it narrows its net losses. The stock isn't cheap at 12 times its projected sales for 2026, but it could have plenty of room to run as AT&T, Verizon, and other telecom companies scale up their LEO broadband networks to reach more customers.
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Leo Sun has positions in AT&T. The Motley Fool recommends Rocket Lab USA, T-Mobile US, and Verizon Communications. The Motley Fool has a disclosure policy.
