Intuitive Machines (LUNR +56%) surged today after announcing a $4.82 billion NASA contract. This follows an earlier $117 million contract in August, which also boosted its shares. The new ten-year contract is a significant milestone for LUNR, which reported around $115 million in total revenue through the first half of 2024.
- What does LUNR do?
- The $4.82 billion NASA contract involves providing services for NASA's Artemis mission, which aims to establish a presence on the Moon. This aligns perfectly with LUNR's goals, making the partnership highly synergistic.
- Despite today's enthusiasm, LUNR could face setbacks. Space shuttle launches are complex and prone to delays and issues. For instance, Boeing's (BA, Financial) Starliner spacecraft has experienced multiple problems, including leaks and thruster malfunctions. Additionally, the ten-year contract is not guaranteed beyond September 2029, as NASA has the option to extend it.
- Given today's stock surge, LUNR might consider raising funds through stock offerings, although it currently has sufficient cash. The company has secured nearly $70 million in new backlog this year and raised its FY24 revenue outlook to $210-240 million from $200-210 million. However, stock offerings remain a possibility as LUNR funds its new NASA contract.
In summary, the $4.82 billion NASA contract highlights LUNR's technological prowess in space communications and navigation. If NASA's Artemis mission succeeds, LUNR could see substantial benefits. However, the long timeline means potential short-term challenges.
