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Analysts revise Intuitive Machines stock price target after earnings
Water, water everywhere, maybe even on the moon.
While no one actually believes that the moon is made of green cheese — although in this day and age, you never know — Earth's satellite could be a source of some good old H2O.
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For the longest time scientists thought the moon was bone dry, like a lunar version of the Mojave Desert.
However, as technology improved, scientists were able to take a closer look at samples from earlier Apollo missions and they found evidence of water.
The moon's south pole is thought to contain water ice, which is a valuable resource for future exploration, according to a 2023 report from the World Economic Forum .
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The international think tank said that scientists were interested in pockets of ancient water ice because they could provide a record of lunar volcanoes, material that comets and asteroids delivered to Earth, and the origin of oceans.
Intuitive Machines CEO: commercial space activities are here to stay
If water ice exists in sufficient quantities, it could be a source of drinking water for moon exploration and help cool equipment, the forum said. The report added that the water could also be broken down to produce hydrogen for fuel and oxygen to breathe, supporting missions to Mars or lunar mining.
The people at Intuitive Machines LUNR are looking to tap into that thirst for knowledge.
Related: Analyst adjusts Rocket Lab's stock price target on space economy outlook
The space-exploration company, which posted third-quarter results on Nov. 14, said that its IM-2 mission would launch in the first quarter from NASA's Kennedy Space Center.
"The mission is designed to validate water hunting infrastructure such as a prospecting drill and essential mobility services like our Micro Nova Hopper, which is designed to deploy off the lander and prospect by hopping across the lunar surface," Co-Founder and Chief Executive Steve Altemus told analysts during the company's earnings call .
Altemus said the third delivery mission, IM-3, is undergoing integrated vibration testing, and the company anticipates a mission window through early 2026.
"Our government has made it clear that returning to the moon is of strategic importance to the United States," he said. "Collectively, the industry must continue to produce capabilities that enable expansion of the lunar economy."
"For our part," Altemus added, "we plan to accomplish this through a steady cadence of missions gradually learning about how to live and work on the moon."
In response to a question about the incoming Trump administration, Altemus said "we had bipartisan support over the past five or six years, certainly in cislunar space," referring to the volume of space between the Earth and the Moon or the Moon's orbit.
He said the company expects the U.S. to continue to focus "strategically on the moon and returning humans to space or to the moon. But we see that really the commercial space activities are here to stay. And commercial space will be an integral component to opening up the cislunar economy."
Analyst: LUNR positioned for more wins
He added that Intuitive Machines is now an integral partner with NASA for space communications and navigation and it expects that position to continue and strengthen in the new administration.
The Houston company, which was founded in 2013 and went public in 2023, had a very strong Q3, Altemus said, highlighted by key awards, revenue growth, "and we closed the quarter with record highs in both cash and backlog, validating our upward trajectory."
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For the quarter the company posted a loss of $55.4 million, swinging from a profit of $33.3 million in the year-earlier quarter. The year-earlier figure reflects certain noncash corrections tied to certain historical estimated contract losses.
Revenue totaled $58.5 million, more than four times the year-earlier figure, and the company ended the quarter with $89.6 million in cash, the highest quarter-end cash balance in its history.
The company also said it was narrowing its full-year 2024 revenue outlook to a range of $215 million to $235 million and it's trending toward the midpoint.
Several investment firms issued research notes following the earnings report.
Cantor Fitzgerald's Andres Sheppard raised the investment firm's price target on Intuitive Machines to $15 from $10 and affirmed an overweight rating on the shares, according to The Fly.
Sheppard cited the IM-2 mission and noted that management also affirmed that it was targeting the IM-3 mission in early 2026 and an IM-4 mission that the firm expects in early 2027.
Roth MKM raised its target on Intuitive Machines to $15 from $10 and maintained a buy rating on the shares.
The investment firm points to the company's better-than-expected Q3 revenue and says it is positioned to secure additional program wins and execute additional successful lunar missions over the next several quarters.
Benchmark analyst Josh Sullivan raised the investment firm's price target on Intuitive Machines to $16 from $10 and reiterated a buy rating.
Intuitive's successful commercial model approach to space infrastructure "becomes even more of an asset under the new administration," he said.
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