Intuitive Machines has a 92 per cent upside, says Roth

A new contract win looks good on space tech company Intuitive Machines (Intuitive Machines Stock Quote, Charts, News, Analysts, Financials NASDAQ:LUNR), according to Roth Capital Partners analyst Suji Desilva, who reiterated a “Buy” rating on the stock in a Wednesday update.

Founded in 2013, Intuitive Machines supplies space products and services to support robotic and human space missions. The company announced on Tuesday that its subsidiary joint venture Space Network Solutions in partnership with aerospace engineering services firm KBR secured a NASA OMES (Omnibus Multidiscipline Engineering Services) contract. 

The five-year program award comes with a maximum potential value of $700 million and is related to the Joint Polar Satellite System, NASA’s Exploration and In-space Services program.

“This win is of strategic importance, allowing Intuitive Machines to support NASA in designing, developing, and demonstrating critical technology required to support the emerging orbital servicing market, and a validation of the Company’s experience in spacecraft development, autonomous systems, and near-space communications. We look forward to collaborating with NASA to push the boundaries of what’s possible in space,” said Intuitive Machines CEO Steve Altemus in a statement.

In 2019, Intuitive Machines was awarded a $77 million contract by NASA to build and launch its Nova-C Moon lander. The company’s shares began trading on the Nasdaq Exchange in February 2023 after merging with a SPAC last fall. So far, the stock initially shot up like a veritable rocket before plummeting to Earth just as quickly and is now trading at about the level it began two months ago.

But Desilva sees upside over the next year and has maintained a 12-month target of $20.00, good for a projected return at the time of publication of 92 per cent.

On the new contract win, Desilva wrote, “Despite the IDIQ (indefinite delivery indefinite quantity) nature of the contract, we nonetheless expect LUNR to add several hundred million dollars of pipeline visibility over the next five years, increasing confidence in our forecasts.”

“We are encouraged that LUNR has added diversification from its current lunar access service mission contracts, which are ongoing, with an initial launch planned mid-CY23. This contract also increases our confidence in the market value of LUNR’s specialized offerings and capabilities, and we believe several additional programs of varying sizes are in the pipeline for CY23 as well,” he said.

By the numbers, Desilva is forecasting Intuitive Machines to deliver full 2022 and 2023 revenue of $88.5 million and $274.0 million, respectively, and 2022 and 2023 EPS of negative $0.06 per share and negative $0.38 per share, respectively.