What Is Going on With Astra Space (ASTR) Stock?

  • Shares of launch services provider Astra Space (ASTR) jumped double digits on Monday before crashing.
  • The company’s contract win to supply its spacecraft engines initially buoyed investor sentiment.
  • Poor peer performances within the broader space economy likely affected ASTR stock.
ASTR stock - What Is Going on With Astra Space (ASTR) Stock?

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Launch vehicle services provider Astra Space (NASDAQ:ASTR) initially enjoyed a meteoric ascent on Monday morning, with ASTR stock gaining nearly 12% before curiously plunging back down to ground level. Earlier, Astra Space announced a major contract win, though it apparently failed to hold investors’ interest. This dynamic reflects the wild ebb and flow of the space economy thus far.

According to the company’s press release, Astra announced an engine contract with an Airbus (OTCMKTS:EADSY)-linked joint venture. Called Airbus OneWeb Satellites (or AOS), the organization selected the Astra Spacecraft Engine for integration into AOS-manufactured small satellites. Currently, AOS produces satellites for Airbus U.S. Space & Defense, in support of U.S. government programs.

The above news comes amid Astra’s disclosure of its financial performance for the second quarter of 2022. During the conference call, management announced that the company commenced deliveries of the Astra Spacecraft Engine. A highlight included total committed orders increasing 69% over the first quarter of 2022’s result.

“We have made substantial changes to our operating plan to concentrate and focus our investments on the development and introduction of the upgraded version of our launch system and the increased production of the Astra Spacecraft Engine,” stated CFO, Kelyn Brannon at the time.

ASTR Stock Must Climb a Wall of Reputational Worries

According to Morgan Stanley, the “global space industry could generate revenue of more than $1 trillion or more in 2040, up from $350 billion, currently.” What’s interesting is that Morgan Stanley’s projections represent a relatively conservative estimate. For instance, Bank of America sees the sector hitting $2.7 trillion by 2045.

Indeed, the enormous potential of this burgeoning industry previously attracted speculators to names like ASTR stock. However, the underlying company failed to deliver the goods thus far. On a year-to-date basis, Astra shares slipped about 87%.

Certainly, ASTR stock doesn’t represent the only disappointment in the sphere. Much-hyped Virgin Galactic (NYSE:SPCE) has tanked 55% for the year. Rocket Lab (NASDAQ:RKLB), despite its promising (albeit speculative) profile, is down 57% over the same frame.

Specific to ASTR stock, the issuing company suffered its own conspicuous setbacks. Earlier this month, CNBC reported that Astra “would not have any additional flights this year after the company reported another quarterly loss.”

In June, Astra shares incurred substantial losses when its rocket failed to deliver NASA satellites into orbit. Therefore, investors may be in a wait-and-see mode regarding ASTR stock after myriad disappointments.

Why It Matters

While space may be the final frontier, the monetary universe essentially revolves around Federal Reserve chair Jerome Powell. On Friday, Powell delivered his annual policy speech at Jackson Hole, Wyoming. In short, the central bank remains committed to addressing multidecade highs in inflation, thus translating to further rate hikes.

Unfortunately, rising borrowing costs impose pressure on growth-oriented investments like ASTR stock. With reduced capitalization opportunities, many investors head toward value-focused names, leaving speculative fare like Astra Space in the shadows.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Article printed from InvestorPlace Media, https://investorplace.com/2022/08/what-is-going-on-with-astra-space-astr-stock/.

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