Today, shareholders in Sidus Space (NASDAQ:SIDU) finally have something to celebrate. Shares of SIDU stock have more than doubled today on news that the company was named a “teammate” on the NASA Exploration Extravehicular Activity (xEVAS) services contract.
Collins Aerospace and Axiom Space won this massive $3.5 billion services contract. As part of the Collins xEVA team, Sidus will help design and manufacture next-generation spacesuits. Astronauts will wear these suits as they head to the moon. Additionally, this contract is expected to support International Space Station work, as well as other commercial space endeavors.
Let’s dive into this deal for investors interested in Sidus Space.
Time to Buy SIDU Stock on this News?
Given the size of this contract, investors have rightly come to the conclusion that even a microscopic slice of this pie should increase Sidus’ valuation. Trading at less than $50 million at the time of writing, it’s easy to make the case that Sidus’ price-to-sales ratio will come down on this news.
Indeed, this contract is on top of the company’s existing “space-as-a-service” business model, in which it provides satellite design and launch services, mission operations, and other support functions for the space industry. Should Sidus be able to turn a profit in the coming years, SIDU stock could be an interesting way to gain leveraged exposure to this sector.
Like other high-growth space-related stocks, SIDU stock has been on a serious downtrend this year. Still down from its 52-week high, Sidus Space is a company many investors have taken off their watchlists. Indeed, in this unforgiving macro environment, there’s reason to be cautious. Government spending on space exploration is already a contentious topic. And with the government looking to reduce its deficit, this could be a sector that could stall, at least for the next few years.
That said, this contract is encouraging. For investors looking at the space sector, SIDU stock is one to watch.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.