Similar to the spacecraft of Intuitive Machines, its stock has soared in the past week. Just a little over a month after reaching all-time lows, and as its IM-1 mission journeyed towards the lunar surface, shares of Intuitive Machines have surged by more than threefold since early January. This surge is attributed by Wall Street analysts to the enthusiasm of retail investors for the space company’s advancement towards an unprecedented achievement.
The Texas-based lunar enterprise’s stock, under the fitting ticker symbol of “LUNR,” presently trades at around $8 per share as of Thursday’s market close, a significant rise from January’s lows of approximately $2. At one point during this week, as IM-1 progressed through milestones leading up to its landing attempt, the stock peaked at over $13 in trading.
Following the successful touchdown of the lander, named “Odysseus” after the legendary figure in Greek mythology, on the moon’s surface, the stock experienced another surge. “We’ve never witnessed a publicly traded company go through [a moon landing attempt]. So this is new, not just for investors, but for us analysts as well,” remarked Cantor Fitzgerald’s Andres Sheppard to CNBC.
Sheppard likened Intuitive Machine’s landing to a scenario of a biotech company awaiting FDA approval for a new drug: “It’s a bit of a binary outcome,” Sheppard said.
While Sheppard anticipated a rise in Intuitive’s stock price after a successful landing, potentially reaching as high as $15 per share, he cautioned that “that valuation is certainly ahead of the company’s financials” — as “people are getting caught up” in the excitement and historic significance of IM-1 landing on the moon, he noted.
Intuitive Machines went public through a SPAC merger less than a year ago and has predominantly traded below its debut pricing since then. Only a few Wall Street analysts cover the $1 billion space company. Among the firms listed by FactSet as covering Intuitive Machines, all four analysts have buy-equivalent ratings on the stock – and all four have seen the stock surpass their pre-launch price targets.
In addition to the technological and financial advancements that IM-1 signifies for Intuitive Machines, analysts highlighted the enthusiasm for the first U.S. moon landing in over 50 years, as well as the first by a corporate entity rather than a government agency.
“We get to see how these applications in space can capture the imagination and vision of investors … hopefully it is successful, as I think that will do a lot for the space industry as a whole,” said Benchmark analyst Josh Sullivan to CNBC before the lunar landing.
Sullivan, along with Canaccord Genuity analysts Austin Moeller and Sheppard, all agreed that retail investors, not institutional ones, are propelling the current rally of Intuitive Machines. Sheppard stated that his firm estimates about 80% of trading over the past week was conducted by retail traders.
“There’s huge momentum being driven by the retail community behind this,” Sheppard emphasized. Sullivan also cited the global news coverage of Intuitive’s mission as another contributing factor, providing the company with broader exposure. “The successful milestones are adding up to a point where [a moon company] is becoming a commercial reality, and I think that’s starting to catch on,” Sullivan remarked.
IM-1 steadily advanced through the 16 milestones outlined by the company before the launch. However, Intuitive is not only overcoming the technological challenges associated with a maiden spaceflight but also meeting the requirements to receive payment from its primary customer.
The mission operates under a $118 million contract with NASA, with specific milestones set for payment. Yet, as Sullivan pointed out, IM-1 represents more than just earning compensation for an existing contract.
“It is really about proving a track record of success in the very harsh environment of space, so that in the future when they’re going to NASA … the likelihood of them winning those very large contracts increases pretty substantially,” Sullivan explained.
A fundamental aspect of NASA’s Commercial Lunar Payload Services (CLPS) program is the competition among companies vying to transport cargo on upcoming moon missions. One of Intuitive Machines’ competitors, Astrobotic, encountered significant issues during its inaugural moon mission last month, preventing the company from attempting a landing.
Both Intuitive Machines and Astrobotics, among others, have already secured NASA contracts for additional missions. Analysts view Intuitive’s progress thus far as a crucial differentiator in future bidding processes.
