Wall Street’s Favorite Space Stocks? 3 Names That Could Make You Filthy Rich


  • Grab these three favorite space stocks before they blast off.
  • Redwire (RDW): This space roll-up has a wide variety of products and services for the burgeoning industry.
  • Planet Lab (PL): Geospatial data should make for a booming business throughout the 2020s.
  • Lockheed Martin (LMT): The defense giant has an underappreciated space and satellite business.
Favorite Space Stocks - Wall Street’s Favorite Space Stocks? 3 Names That Could Make You Filthy Rich

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The space industry is heating up right now. It’s time to start picking up favorite space stocks now before the industry truly takes to the stars.

For years now, wealthy individuals have been pushing the space industry forward. Visionaries such as Jeff Bezos and Elon Musk are investing heavily in the space sector, and that has attracted all sorts of new talent and ideas to the industry.

Excitement further mounted in February when Intuitive Machines (NASDAQ:LUNR) soared on the news that it had landed a craft on the moon. This was the first time a private company had ever landed a vehicle on the moon, and the first time an American vessel had been there since 1972.

It’s not just moon landings, either. From space tourism to satellite communications, low orbit manufacturing and countless other potential applications, the final frontier is full of possibility. And it’s not just commercial uses either, securing space will be a vital function for defense departments in the decades to come.

All this should represent a tremendous opportunity for the space industry to grow. That makes it a wonderful time for these three favorite space stocks.

Redwire (RDW)

An image of a rocket flying past another planet
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Redwire (NYSE:RDW) came about as a special purpose acquisition company (SPAC) focused on the space industry. The founders decided to roll-up a number of different small space production and services companies. While the idea made plenty of sense, the initial valuation was off-target, as was common for SPACs in 2021. RDW stock quickly plunged from $10 to the low single digits.

However, Redwire has stabilized as the core business is performing quite well. Specifically, Redwire is the combination of more than half a dozen different space-related companies merged into one entity. Under the Redwire umbrella, it furnishes launch accommodations, satellite payloads, solar arrays, and engineering and modeling services. Right now, the space sector has a ton of tiny vendors; over time, Redwire wants to consolidate many of these into a significant industry player.

And the plan is working. Redwire grew revenues from $161 million in 2022 to $244 million in 2023. Analysts see that figure rising to $299 million in 2024. While the company still hasn’t reached profitability, its rapid top-line growth rate should help build investor enthusiasm for RDW stock in the coming months.

Planet Lab (PL)

A vector image of two satellites orbiting above Earth
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A group of ex-NASA scientists founded Planet Lab (NYSE:PL) to develop an earth imaging business.

Earth imaging is to take satellite imagery of the entire globe each and every day. Planet Lab has focused on frequency; by having the most updated Earth imagery, it can provide nearly real-time data to a wide variety of clients.

Earth imagery can help provide unique insights in fields such as agriculture and forestry, shipping, oil and gas, natural disaster response, and various others. With the invasion of Ukraine and unrest in the Middle East, Earth imagery has proven its value for defense departments and intelligence agencies as well.

Planet Lab’s recent earnings report was better than expected, with the net loss of 5 cents per share being much closer to breakeven than expected. The company also continues to post double-digit top-line growth and has grown its customer base to 976 different clients.

The firm has one more distinctive advantage compared to many space peers: Its balance sheet. As of last quarter, Planet Lab has $315 million of cash on hand. This gives the company plenty of time to ramp up operations and reach solid profitability going forward as the Earth imagery industry continues to take off.

Lockheed Martin (LMT)

Close top view of a Lockheed Martin (LMT) F-35C Lightning II with afterburner on
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Lockheed Martin (NYSE:LMT) is a leading defense company. While it is well known for fighter jets and other military gear, the firm has an impressive space division too.

In 2023, Lockheed’s space operations delivered $12.6 billion in revenues, which was up nicely from $11.5 billion in 2022. The company is a leader in satellite fabrication, and that should be a rapidly growing field in the coming years.

Lockheed also continues to win key defense contracts as it pertains to the space sector. For one example, Lockheed has a $515 million contract to modernize the country’s global positioning satellite “GPS” system and keep it safe from foreign intruders.

In addition to its own space efforts, Lockheed takes a venture approach to the industry. It invests in a variety of small start-ups in the industry. One of these, small satellite maker Terran Orbital (NYSE:LLAP), has proven promising enough that Lockheed has made an offer to acquire all the outstanding shares of Terran that it doesn’t already own. In this way, Lockheed can both build its own space business and use its world-class balance sheet to acquire plenty of other promising firms in the industry.

On the date of publication, Ian Bezek held a long position in LMT stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

Article printed from InvestorPlace Media, https://investorplace.com/2024/03/wall-streets-favorite-space-stocks-3-names-that-could-make-you-filthy-rich/.

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