One of the hotter stocks on the market doesn't even reside on Planet Earth... at least, as far as its main business is concerned.
For the second week in a row BlackSky Technology (BKSY -3.37%) was posting double-digit gains in its share price, thanks mainly to a new government contract it was awarded. The digital satellite imagery company's stock was up a very impressive 44% week to date as of Friday early morning, according to data compiled by S&P Global Market Intelligence.
24 million reasons to be happy
On Tuesday, BlackSky announced that it had been awarded a contract from the U.S. Department of Defense's National Geospatial-Intelligence Agency (NGA) to monitor military and economic complexes. The arrangement has a duration of four years, and the company said it is worth over $24 million.
Image source: Getty Images.
That contract is already producing revenue for BlackSky; in its press release touting the award, the company said it has received an initial "base and surge option" payment of $2 million.
BlackSky already had momentum behind it even before the contract was announced. Early last week it announced plans for a new set of multispectral, large area collection satellites, christened Aros. It has secured a partner it did not identify to help develop these next-generation "birds," which it aims to launch in 2027 at the earliest.
Remember: Space stocks are speculative
While the just-inked contract and the big plans for new satellites are impressive developments, up to a point, investors need to remember that BlackSky is still a relatively early-stage company. It is also a space stock, which in itself is a highly speculative type of business. BlackSky is very expensive in terms of valuations just now, so I'd be very careful in considering it for any equity portfolio.
