Space stocks could be entering into a new golden age for investors. These companies have just entered the mainstream awareness, meaning there’s plenty of fuel left in the tank for these brands to shoot to new heights.
Space stocks ride on the tailwinds of recreational space exploration just beyond the Earth’s outer atmosphere. Many companies are trying to this make exploration make affordable — and not just for billionaires. However, the biggest growth is likely to be in satellite launches and adapting existing satellite constellations for defense and enhancing commercialization.
Satellite tech is increasingly being turned to by governments and corporations to provide an encrypted communication channel that cannot easily be intercepted, as cyber crimes become more common.
So here are the three best space stocks that Wall Street is bullish on in light of these developments.
Rocket Lab (RKLB)
Rocket Lab (NASDAQ:RKLB) is an aerospace manufacturer and small satellite launch service provider. It carries collective endorsement of Wall Street as analysts rate it as a “Buy” along with a $8.06 price target.
This optimism comes from the fact that RKLB’s revenue is expected to grow anywhere from 52-92% in FY2024. RKLB’s FY2023 fundamentals are also making Wall Street feel more positive. The company has a fully booked schedule of 22 Electron missions expected this year. This contrasts with its net losses and failed launches from previous quarters.
RKLB stock is also developing its Neutron vehicle, which will lead to further efficiencies and get its bottom line under control. For these reasons and more RKLB is one of those space stocks that Wall Street loves.
AST SpaceMobile (ASTS)
AST SpaceMobile (NASDAQ:ASTS) is focused on building the first space-based cellular broadband network. It’s also one of those space stocks that Wall Street is in love with, as seen in its analyst consensus rating of “Strong buy” with a predicted increase of 452.22% in the next twelve months.
No revenue growth for ASTS stock is expected for FY2023, but this is expected to change in FY2024. Its breakeven profitability is expected near the end of FY2026, according to analysts.
Things also look like they are moving ahead for ASTS. The company is progressing with closing its fundraising deal and has also secured initial ground infrastructure orders from two customers for planned commercial service.
Developments like these are always pleasing to see, and its business model is ambitious as it could connect billions of people to the internet and clear up any gaps in coverage by traditional internet providers. This makes it a great option in space stocks to buy.
Planet Labs (PL)
Planet Labs (NYSE:PL) is the last space stock that is also rated as a “Strong buy“. This company operates a fleet of Earth-imaging satellites. The company sees commercial applications in the industries of climate monitoring, forestry and more.
Although Planet Labs’ EPS is currently negative, its net loss is expected to gradually decline over the next several years. If analyst estimates are correct, then it could reach breakeven profitability sometime in FY2027.
This improvement in its profitability also comes with strong revenue growth, with its top-line growth accelerating to 27.33% in FY2025.
The strong top-line momentum is expected to carry over, as it recorded its best-ever financial quarter in December last year. It also beat its previously posited guidance for the quarter, with EBITDA losses beating managerial guidance.
Looking ahead, the firm has a pipeline to capture lucrative government, defense and industrial contracts to accelerate its path toward profitability. This makes it a space stock investors should have on their watch lists.
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.
