BlackSky Technology (BKSY 6.68%), the Earth imaging spy satellite company, scored a price target hike from H.C. Wainwright analyst Scott Buck today, as StreetInsider.com reports. Maintaining a buy rating on the space stock, Buck raised his price target on the shares by 40%, to $28.
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What Wainwright said about BlackSky
With 2025 just half over, BlackSky stock has already doubled year to date, a fact Wainwright's Buck attributes to "expectations for increasing demand [for spy satellite images], given the deployment of the company's Gen-3 satellites and increasing geopolitical tensions."
How much demand? Buck predicts revenue will grow 29% in 2025, up dramatically from single-digit growth in 2024, helped by higher defense spending coming from NATO countries. Buck notes that BlackSky already earns 70% or better gross profit margins, so if the company can just apply those margins to more revenue, its net profits should increase dramatically.
Is BlackSky a buy?
Not everyone's so sanguine on BlackSky's prospects. According to data from S&P Global Market Intelligence, most analysts think it will be 2028 before BlackSky is able to deliver consistent profits -- even if revenue grows as briskly as Wainwright is projecting.
Free cash flow could turn positive sooner than that -- 2027, according to the projections. And by 2028, the company might generate cash profits in the neighborhood of $30 million, putting its price-to-free cash flow ratio in the low-20s.
Still, that's three years in the future. As much as I love space stocks, at its present market capitalization of $700 million, and with a price-to-sales ratio of nearly 5x, BlackSky stock looks a bit too expensive for my taste. I'd want to see a significant pullback in price before buying into this one.
