SpaceX IPO is 'changing perceptions' about space. Here are stocks to watch.
The SpaceX IPO is driving fresh investor flows into the space sector, with smaller space and related stocks soaring since the news of the offering became public, Bloomberg notes / Photo: SpaceX
Bloomberg has named 13 aerospace stocks that investors should watch ahead of SpaceX’s IPO. SpaceX plans to price the offering on June 11, with the market debut on June 12 – the day of a rare alignment involving Mercury, Venus, and Jupiter, Bloomberg noted in a separate article.
SpaceX’s market debut is changing perceptions of space, turning it from a “more far out there, whimsical science fiction industry” into a sector where companies are “doing some pretty incredible things right now,” ProcureAM cofounder and CEO Andrew Chanin told Bloomberg.
That is driving fresh investor flows into the sector, while Wall Street is racing to find the next big winner in space exploration, Bloomberg wrote.
Space stocks ahead of SpaceX IPO
Satellite-data provider Planet Labs, with a market capitalization of $14.8 billion. Since the start of the year, its shares have surged almost 111% to $41.60 per share. The stock has eight “buy” calls from Wall Street analysts, three “hold” ratings, and one “sell” recommendation. The average target price of $35.40 per share is below the latest closing price.
Low-cost satellite manufacturer York Space Systems, valued at $3.3 billion. The company completed its IPO on the New York Stock Exchange in late January, but its shares have plunged nearly 33% since then. One reason is that the company’s first-quarter financial results fell short of Wall Street expectations, the Motley Fool wrote. York Space has seven “buy” calls versus two “hold” ratings from analysts. The average target price of $34.70 per share implies upside of 35%.
Lunar rover developer Intuitive Machines, which has a market capitalization of $5.2 billion. Its shares have doubled since January 1. Eight Wall Street analysts recommend "buy" on the stock, two rate it “sell,” and one “hold.” The average target price of $37.40 per share is about 15% above the latest closing price.
Commercial satellite communications network operator AST SpaceMobile, valued at $34.2 billion. Its shares are up 21% year to date. Six Wall Street analysts rate the stock “hold,” five recommend "buy," and three rate it “sell.” The average target price of $88.80 per share is nearly in line with the Monday closing price.
Rocket and military aviation components maker Applied Aerospace & Defense. The company filed paperwork with the U.S. Securities and Exchange Commission in May for an IPO. The listing date has not yet been determined.
Rocket Lab, which specializes in cargo delivery to orbit and has a market capitalization of $73.7 billion. Its shares have climbed 82.5% since the start of the year. Sixteen Wall Street analysts have assigned the stock a “buy” rating, while only four rate it “hold.” The average target price of $105 per share is 17.5% below the latest closing price.
Satellite operator Globalstar, which Amazon is to acquire for $90 per share. The company’s shares have gained almost 28% year to date to $81.90 per share, about 9% below Amazon’s offer price.
Satellite communications operator and SpaceX shareholder EchoStar, which has a market capitalization of $39.6 billion. Its shares are up nearly 26% since January 1. Four analysts recommend "buy" on the stock, while two rate it “hold.” The average target price of $149 per share is 9% above the latest closing price.
Orbital infrastructure specialist Voyager Technologies, valued at $2.2 billion. Its shares have gained nearly 48% year to date. Eight Wall Street analysts have assigned the stock a “buy” rating, while one rates it “hold” and another “sell.” The average target price of $38.30 per share is 2% above the closing price on Monday.
The “space craze” has spread to Europe as well, Bloomberg wrote. In the region, the news agency named three stocks investors should watch: German satellite maker OHB, UK-based SpaceX supplier Filtronic, and French Starlink rival Eutelsat.
Exchange-traded funds focused on the space industry are also becoming increasingly popular. In the U.S., Bloomberg highlighted Procure Space ETF, Tema Space Innovators ETF, and ARK Space & Defense Innovation ETF. In Europe, it named VanEck Space Innovators UCITS ETF and Seraphim Space Investment Trust.
What analysts say
SpaceX’s IPO confirms that the space industry has strong potential for institutional investors, Greg Pendy, an analyst at Clear Street, told Bloomberg. More importantly, however, the offering establishes a benchmark investors can use to value other publicly traded space companies.
Steve Sosnick, chief strategist at Interactive Brokers, shares that view. He said a successful SpaceX IPO would have a “halo effect” on valuations across the sector.
“There are already several innovative companies being built across the space ecosystem, but the SpaceX IPO will bring more attention, capital, and credibility to the category as a whole,” Yuri Khodjamirian, chief investment officer at Tema ETFs, said.
However, “a better capitalized SpaceX would be a more formidable competitor” for other companies in the sector, whose shares have already posted substantial gains, Sosnick warned.
At the same time, European companies tied to the space industry are still trading at lower valuation multiples than their U.S. peers, Lale Akoner, global market analyst at eToro, noted. She said that if those companies “expand into the space more, then it’s a good buying opportunity.”
