The 3 Most Undervalued Space Stocks to Buy in July 2024

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  • Can investors miss out on becoming a part of space history with these undervalued space stocks?
  • Sidus Space (SIDU) The story is reminiscent of Tesla’s early beginnings, but for innovative micro satellites instead of electric vehicles.
  • Boeing (BA) Shareholders received two major signals that the bottom has been exhausted.
  • Redwire Corporation (RDW) The company looks like it can develop a strong moat, sandwiched between government and commercial contracts.
Undervalued Space Stocks - The 3 Most Undervalued Space Stocks to Buy in July 2024

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In April’s report, McKinsey & Company projected that the global space ecosystem will rise to a $1.79 trillion inflation-adjusted value by 2035 from $630 billion in 2023. This encompasses the entire infrastructure that leverages the space economy, including undervalued space stocks, from software and telecommunications to manufacturing and terrestrial equipment.

While SpaceX is pushing the technological envelope and setting new standards, the company is still not publicly listed. In turn, this makes investors hesitant to hold a stake in the emerging space economy. 

These undervalued space stocks should be considered in your portfolio.

Sidus Space (SIDU)

Smartphone with logo of American aerospace company Sidus Space (SIDU) on screen in front of website. Focus on center-right of phone display. Unmodified photo.
Source: T. Schneider / Shutterstock.com

What Tesla turned into for the EV sector, Sidus Space (NASDAQ:SIDU) shows nascent signs of growing into a similar role for the space satellite sector. From the Cape Canaveral facility in Florida, Sidus has an engineering and manufacturing division to churn out multi-mission LizzieSat microsatellites.

From life cycle designs and prototypes to precision engineering and safety analysis, the company has a multidisciplinary approach to deploy mission-critical hardware, using the hybrid 3D printing approach. On the other end of that equation, Sidus combines Space-as-a-Service with Data-as-a-Service business model.

Once the LizzieSat satellites are in low-Earth orbit (LEO), Sidus employs machine learning and analytics to process raw sensor data and deliver actionable insights for subscription fees. With the first LizzieSat launched in Q1 from the SpaceX Transporter-10 Rideshare Mission, this ranges from agriculture and maritime to gas exploration and government contracts for NOAA.

Following that milestone, in Q1 ‘24 earnings, Sidus Space reported a $3.8 million net loss, a loss increase of 11% from the year-ago quarter. After two capital fundraisings, the company increased its cash reserves from $1.2 million to $6.17 million during the period.

From the 52-week high of $18.85, SIDU stock returned to the penny stock zone. Presently priced at $2.59 per share, SIDU shares are down 63% year-to-date. 

Boeing Company (BA)

BA stock: a blue and white Boeing 787 flying in the sky above the clouds
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The saga of Boeing’s (NYSE:BA) shadiness, revolving whistleblowers, quality control and DEI prioritization has resulted in a dual investing stance. On one hand, it is easy to make the case that Boeing’s moat is too wide, just as it can be said of JPMorgan Chase (NYSE:JPM) for the banking sector.

On the other hand, more headwinds could be hiding under Boeing’s hood. While the Federal Aviation Administration (FAA) is still investigating Spirit AeroSystems’ falsified titanium documentation, Boeing agreed to buy the supplier on June 30th for $4.7 billion.

Most importantly, the company was convicted of criminal fraud conspiracy related to 737 MAX crashes that resulted in 346 deaths. On July 7th, Boeing’s guilty plea included a $243.6 million fine in addition to the $455 million required for compliance and safety programs. 

Such low fines, simultaneous with a major acquisition, reaffirm that Boeing is indeed too big to fail. In turn, the company’s major role in the space economy is unlikely to be thwarted despite setbacks. For investors, this translates into a proverbial “buy the dip” for BA as an undervalued space stock.

At the present price of $186, BA stock is significantly under the 52-week average of $203.62 per share. Nasdaq’s forecasting data points to a $213.21 average BA price target with a ceiling of $270 per share. 

Redwire Corporation (RDW)

An image of a rocket flying past another planet
Source: Swill Klitch/Shutterstock

What TSMC (NYSE:TSM) is to Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD), Redwire Corporation(NYSE:RDW) is poised to become to nascent space infrastructure. Initially formed from the merger ofAdcole Space and Deep Space Systems, the Jacksonville company emerged from nine strategic acquisitions since 2020, heading to supply the space economy with critical building blocks. 

These include next-gen solar arrays, navigation, imaging and control equipment, components for space habitats, 3D printing payloads and design/engineering. Based on Redwire’s connections with the DoD, Lockheed Martin (NYSE:LMT), NASA and DARPA, it is clear that Redwire is another Boeing in the making where state and private interests coordinate.

Accordingly, RDW stock has gone up 140% year-to-date. While this is not the best entry point, investors should put RDW stock on a watchlist. Considering its borderline penny stock territory, presently priced at $7.10, a major price correction is almost certain. Nasdaq’s average RDW price target is $7.25 with a ceiling of $10 per share.

On the date of publication, Shane Neagle 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.

On the date of publication, the responsible editor held a long position in NVDA.

Shane Neagle is fascinated by the ways in which technology is poised to disrupt investing. He specializes in fundamental analysis and growth investing.


Article printed from InvestorPlace Media, https://investorplace.com/2024/07/the-3-most-undervalued-space-stocks-to-buy-in-july-2024/.

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