Intuitive Machines (LUNR +10.05%), a lunar landing and exploration vehicle developer, went public by merging with a special purpose acquisition company (SPAC) in February 2023. Its stock opened at $10 and spiked to a record high of $81.99 a few days later, but now trades at $9.
Like many other SPAC-backed space start-ups, Intuitive briefly became a meme stock upon its public debut. But it quickly fizzled out after its missions were delayed, its two completed landings were marred by technical problems, and it racked up more losses. Rising interest rates also compressed its valuations as investors pivoted toward safer stocks. But could a contrarian investment in Intuitive Machines at these depressed levels generate life-changing gains over the next few decades?
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How has Intuitive Machines evolved since its public debut?
Intuitive Machines generates most of its revenue from its long-term contracts with NASA. It's sent two Nova-C landers to the moon for NASA so far: IM-1 (Odysseus) last February and IM-2 (Athena) this March. Odysseus was notably the first successful U.S. moon landing since 1972.
Odysseus and Athena both tipped over after landing on the moon, but they used their solar panels to transmit some data back to Earth before shutting down. Those missions weren't perfect, but NASA still deepended its relationship with Intuitive Machines through new lunar terrain vehicle (LTV) contracts, an exclusive near-space network services (NSNS) contract, and a lunar logistics solutions contract.
NASA also plans to continue sending more Nova-C landers to the moon under its existing Commercial Lunar Payload Services (CLPS) contract. The newer NSNS contract, which is worth up to $4.82 billion, could diversify Intuitive's top line away from its mission-based milestone payments with higher-margin recurring revenue. It's also expanding its "ride-sharing" business to help other companies and organizations deliver their own payloads to the moon. Its planned $800 million acquisition of Lanteris Space Systems, a developer of satellite and space defense systems for commercial and government customers, should further boost its revenue and reduce its dependence on periodic lunar landings.
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Key Data Points
What are Intuitive Machines' challenges and catalysts?
From 2021 to 2024, Intuitive's revenue grew at a CAGR of 46% from $73 million to $228 million. However, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) remain red and it's deeply unprofitable on a generally accepted accounting principles (GAAP) basis.
It's also increased its number of outstanding shares by 560% since its public debut with its big secondary offerings and stock-based compensation expenses. Its upcoming acquisition of Lanteris (for $450 million in cash and $350 million in stock) will exacerbate that dilution.
From 2024 to 2027, analysts expect Intuitive's revenue to rise at a CAGR of 25% to $446 million. They also expect its adjusted EBITDA to turn green in 2026 and rise nearly eightfold to $98 million in 2027. Based on those estimates, its stock still looks cheap at just over 3 times next year's sales.
However, that outdated outlook doesn't actually include its planned takeover of Lanteris, which is expected to close in the first quarter of 2026. In the 12 months that ended on Sept. 30, the combined entity (Intuitive and Lanteris) generated $850 million in revenue, a positive adjusted EBITDA, and had a backlog of $920 million. Intuitive expects that acquisition to position the company as a "vertically integrated, next generation space prime that can design, manufacture, deliver, and operate missions from earth orbit to the Moon, Mars, and beyond." It also expects the combined company to have "adequate cash on hand" for its continued operations.
For now, investors should keep a close eye on its upcoming IM-3 mission (scheduled for 2026), the expansion of its NSNS business, and its integration of Lanteris. These catalysts could transform Initutive from a lunar exploration company into a more diversified space services provider that could gain more government and commercial contracts.
Could Intuitive Machines generate life-changing gains?
According to McKinsey, the global space economy could expand from $630 billion in 2023 to $1.8 trillion by 2035 with more rocket, satellite, and space exploration launches. As one of the early movers in that nascent market, Intuitive could have plenty of room to grow as it wins new contracts and expands its ecosystem.
Unlike many other high-growth stocks, Intuitive doesn't seem overvalued relative to its growth potential. If it can grow its revenue at CAGR of 20% from 2024 to 2035 -- and it trades at a more generous 5 times sales -- its market cap could grow over seven times to $8.45 billion.
Looking further ahead, Intuitive Machines could continue growing as the space economy expands and evolves. So if you're willing to tune out the near-term noise and hold this speculative space stock for a few more decades, it might generate some incredible life-changing gains.
