Space exploration is no longer the stuff of science fiction. It was about a $447 billion industry last year. But researchers from McKinsey are forecasting this sector to grow to $1 trillion by 2030. That makes now a good time to look for moonshot space stocks.
For many investors, a moonshot into space exploration may mean looking for some dependable large-cap companies like Northrop Grumman (NYSE:NOC), Lockheed Martin (NYSE:LMT) or Boeing (NYSE:BA). All of those are solid choices. But if you’re really looking for moonshot space stocks, you’ll want to look at more volatile, small-cap stocks.
Some investors want to invest in SpaceX, Elon Musk’s space exploration company. However, that’s not an option — yet.
Fortunately, several small-cap companies are at the forefront of space exploration but priced in a way that offers investors the opportunity to turn small investments into big profits. Here are three of these moonshot space stocks for speculative investors to consider.
Intuitive Machines (LUNR)
Shortly after the new year, NASA is expected to launch the first of many commercial payloads to the surface of the moon. And Intuitive Machines (NASDAQ:LUNR) is playing a key role in the launch. In early December, the company delivered its IM-1 mission Nova-C lunar lander to Cape Canaveral, Florida.
The launch is part of the agency’s Commercial Lunar Payload Services (CLPS) initiative, a precursor to human missions and, potentially, a sustainable human presence.
As part of the CLPS initiative, Intuitive Machines will receive $16.8 million to provide lunar rover services. That’s part of the company’s $135 million backlog.
With a market cap of just $59.93 million as of this writing, Intuitive Machines is considered a micro-cap stock. That’s part of the reason LUNR stock is down 9% in the 30 days ending December 15. Small-cap stocks still aren’t participating in the market recovery.
That’s the nature of investing in speculative stocks. Analysts give the stock a Buy rating with a $10 average price target representing over a 250% gain from its current price.
Rocket Lab USA (RKLB)
As mentioned earlier, you can’t invest in SpaceX. The next best thing is, potentially, Rocket Lab USA (NASDAQ:RKLB). On December 15, the company completed the 42nd successful launch of its Electron rocket.
But the real opportunity is the company’s Neutron usable unibody rocket. That will put the company on a path to profitability, and it will allow the company to compete with SpaceX at the latter company’s low end.
It is a competitive industry, but investors should note that Rocket Lab is already launching rockets. The company was able to build the majority of its infrastructure in a low-interest-rate environment. Its competitors will have to catch up at a time when the cost of capital will be much higher.
As of this writing, seven analysts are covering the stock. It has a Moderate Buy rating, with five analysts offering a Buy and two giving it a Hold. Analysts give the stock an average price target of $7.82, 70% higher than its closing price on December 15.
Planet Labs PBC (PL)
If your idea of moonshot space stocks includes a closer inspection of our planet, Planet Labs PBC (NYSE:PL) is worth a look. The company uses small satellites to take detailed images of Earth that they can sell to customers. The technology has multiple applications in both the public and private sectors. In May, the company announced a partnership with the U.S. Geospatial Intelligence Foundation’s 2023 GEOINT Symposium. The agreement allowed the company to use artificial intelligence (AI) to enhance the detail in its images.
Like the other companies on this list, Planet Labs is not profitable yet. But it does have approximately $315 million of cash on its balance sheet. Analysts project the company will edge closer to profitability in 2024.
The company has a Moderate Buy rating with a price target of $5.76, more than 135% higher than the stock’s current price.
On the date of publication, Chris Markoch did not hold (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.
