Cheap space stocks are emerging as a new opportunity for intelligent investors. These stocks, which are often ignored, have great potential for growth and profitability. The space economy is expected to reach $1 trillion by 2030, making it an ideal time to focus on these promising ventures.
In this article, we explore three such cheap space stocks that have the potential to provide significant returns. Each company is making progress in the space sector, with a focus on satellite technology and launch services. Moreover, these stocks are not only reasonably priced but also supported by strong market trends.
So here are the best cheap space stocks to consider.
Rocket Lab (RKLB)
Rocket Lab (NASDAQ:RKLB) is a launch specialist that is attempting to vertically integrate the space supply chain. It is a low-cost provider currently conducting commercial launches. The company recently successfully launched seven satellites for NASA, along with the Space Flight Laboratory and Spire Global.
Wall Street has bullish expectations for RKLB stock. For one, analysts expect its stock price to reach $9.32 over the next year. This makes it one of those cheap space stocks to buy. Furthermore, the company’s EPS is set to grow by 42.40%.
Rocket Lab also has strong momentum qualities. It leads the industry as the best-performing space stock this year. Analysts have pointed to its strong relationship with NASA as the backbone of its competitive moat. Also, there’s good reason to believe it will expand its customer base this year.
ViaSat (VSAT)
ViaSat (NASDAQ:VSAT) is a company that provides satellite broadband and wireless services, secure networking systems. In addition, in-flight connectivity already represents a high-growth revenue stream for the company.
There’s good reason to believe VSAT is undervalued. Specifically, its stock price took a hit in July, but should recover in the immediate future. The company reported an “unexpected event” during the reflector deployment of its ViaSat-3 Americas satellite, which could significantly impact the device’s performance. ViaSat is considering redeploying satellites from its fleet to optimize worldwide coverage.
Analysts gave VSAT stock a $51.90 price target this year. That consensus is largely unchanged. It trades significantly below its long-term moving averages and its momentum is recovering to the upside.
Planet Labs (PL)
Planet Labs (NYSE:PL) focuses on imaging the entirety of our planet daily to monitor changes and pinpoint trends. This visibility helps scientists address climate change, among other uses. One reason I like this pick is for a contrarian reason. Specifically, it laid off 10% of its staff just a few days ago.
While layoffs may indicate fundamental problems at the heart of a company, this is not the case with PL stock. Instead, management reported that its business is “scaling rapidly”. To me, this suggests it’s laying off workers to improve internal efficiency as well as reduce costs.
The company is not cash flow positive. However, it has almost no debt on its books with a quick and current ratio of 3.90. This is a smart and necessary decision. In fact, many companies that announced layoffs went on to see their stock prices rise. This shows that layoffs aren’t meant to be feared in specific situations, and in PL stock’s case, this is one of them.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
