Shares of spy satellite operator BlackSky Technology (BKSY 11.13%) stock tumbled 5.5% through 9:50 a.m. ET Thursday after reporting worse-than-expected losses this morning -- and missing badly on revenue as well.
Heading into the report, analysts already weren't optimistic, forecasting BlackSky to lose $0.35 per share on sales of under $29 million. In fact, BlackSky's losses totaled $0.44 per share, and revenue was less than $20 million -- just $19.6 million.
Image source: Getty Images.
BlackSky Q3 earnings
BlackSky's sales are moving in the wrong direction, down 13% year over year. Sales growth is also now negative for the year to date -- a bad trend for a supposed growth stock.
Quarterly losses climbed 21%, and negative free cash flow has quadrupled to $19 million burned so far this year.
CEO Brian E. O'Toole tried to put a brave face on the news, focusing less on financial performance than on "strong international demand for our space-based intelligence solutions," and emphasizing the company's $60 million in new contract awards and $323 million in contracted backlog.
NYSE: BKSY
Key Data Points
Is BlackSky stock a buy?
Winning $60 million in contracts was probably the highlight of the quarter. With a book-to-bill ratio of more than 3 for the quarter, it's a virtual certainty that BlackSky's weak sales growth in Q3 will improve in quarters to come.
What's less certain is whether BlackSky will be able to earn a profit off these sales with its margins deteriorating. Analysts polled by S&P Global Market Intelligence think BlackSky can turn its first profit by 2027, but positive free cash flow won't emerge before 2028.
If BlackSky can hit those targets, it might be a decent buy eventually. But even as a fan of space stocks, I have to admit: Things look pretty bleak for BlackSky today.
