I am a value investor. That means two things: First and most obviously, I like stocks that sell for reasonable prices relative to their growth prospects. And second, I'm extremely suspicious of buying into hot growth stocks that are "going up" a lot -- stocks like Intuitive Machines (LUNR 0.18%).

Why Intuitive Machines stock is going to the moon

Two weeks ago, if you recall, Intuitive Machines launched a Nova-C class lunar lander named Odysseus on a course to the moon. On Thursday last week, Odysseus conducted a mostly successful soft landing on the moon -- the first American spacecraft to accomplish this feat in more than 50 years.

No sooner had this news been announced than Intuitive Machines stock exploded 25% higher. And now, I'm giving serious thought to buying Intuitive Machines stock for myself.

Value investor's dilemma

Why would I consider doing this -- and seemingly breaking a cardinal rule of value investing in the process? Well, let me explain first why I might not buy Intuitive Machines stock.

Intuitive Machines went public in the middle of the space SPAC frenzy back in February 2023. IPO'ing at $10 a share, the stock surged past $80 in a matter of days, before turning tail and giving back all its gains. By April 2023, the stock was back trading below its IPO price -- and didn't return to that IPO price until just this month.

But what an exciting month it has been!

From Feb. 7, about a week before the launch, to Feb. 21, a few days after the launch took place, Intuitive Machines stock roughly tripled in price, surging from just $3.50 per share to well over $10. Pulling back just a bit as investors held their breath and awaited the landing attempt, Intuitive Machines surged ahead 16% on Friday, closing the week just below $10 a share. And then on Monday, the stock gave back a lot of those gains, falling to just over $6.25.

At its last recorded stock price, Intuitive Machines sells for less than 2 times trailing sales, which sounds cheap. Problem is, the company is still racking up operating losses (negative $37 million over the last 12 months), burning cash (negative $25 million in free cash flow), and according to data from S&P Global Market Intelligence, is expected to keep on losing money and burning cash for at least the next four years.

Is Intuitive Machines stock a buy?

But what if it doesn't?

Few value investors would give a stock like Intuitive Machines a second glance. It's burning cash. It's not profitable today. It's not (supposed to be) profitable anytime soon. It lacks either a trailing P/E ratio or even a forward P/E ratio on which to value the shares.

And yet, this tiny space stock just became the first American company to ever land a spacecraft on the moon. Granted, the landing wasn't a 100% success. Post-landing reports indicate that Odysseus probably landed sideways, tripping over a rock and toppling over. Intuitive Machines will definitely want to tweak future attempts to prevent this from happening. Quibbles with the quality of the landing aside, though, Intuitive Machines is still unique among space companies. It's also in a uniquely advantageous position to keep on winning contracts from NASA and other companies wanting to put payloads on the moon – especially as it works the bugs out of its landing procedure. 

Indeed, over the next 10 months, Intuitive Machines plans to launch and land two more spacecraft on the moon for NASA. Its 2024 revenue looks likely to nearly quadruple in comparison to 2023, and forecasts for outlying years -- which don't yet figure in the effects of last week's lunar success -- are probably conservative relative to the contracts Intuitive Machines might now win. If revenue rises fast enough, there's the potential for Intuitive Machines to turn profitable sooner than anyone thinks.

While there's no guarantee the stock will be a winner, at a valuation of less than 2 times sales -- which is toward the low end of what space stocks have been selling for lately -- I believe Intuitive Machines stock is cheap enough to buy.

Yes, even for value investors.