Citigroup Inc. (C) analysts believe that the space industry would be worth $1 trillion in annual revenue by 2040, with launch costs projected to drop 95%, which is expected to be opportunistic for technological innovation and expansion. C’s projections match forecasts from Morgan Stanley (MS), Bank of America Corp. (BAC), and others. Moreover, private investment in space companies has broken records over the past decade.
Recently, the ongoing Russia-Ukraine war and the sanctions against Russia are affecting the outer-space environment. In the wake of the war, Russia’s share in the commercial space industry is likely to be diminished, creating benefits for other commercial space markets like the United States. On top of it, the global satellite market is forecasted to grow at a 13.8% CAGR from 2022 to 2027.
With this backdrop, Wall Street analysts expect the satellite stocks BlackSky Technology Inc. (BKSY), Astra Space, Inc. (ASTR), and Planet Labs PBC (PL) to skyrocket in the near term.
BlackSky Technology Inc. (BKSY)
BKSY offers geospatial intelligence, imagery and related data analytic products and services, and mission systems to commercial and government customers. The company’s products are used in various applications, including government defense and intelligence, and catastrophe, climate, and environment applications.
In May, BKSY announced that it was recently awarded a contract from the National Reconnaissance Office (NRO). The Electro Optimal Commercial Layer (EOCL) contract should expand the company’s relationship with the NRO and is expected to utilize BKSY satellite imagery services long-term.
In April, it was reported that the company had expanded its constellation from 12 to 14 high-resolution satellites, which is expected to enable the company to monitor and analyze strategic activities, locations, and assets for its customers, which might be beneficial to BKSY.
BKSY’s total revenue for the first quarter ended March 31 came in at $13.90 million, up 90.5% from its year-ago value. This can be attributed to a rise of 62.9% from the prior-year quarter in imagery and software analytical services revenue to $9.77 million. Cash, cash equivalents, and restricted cash balance improved 175.4% from the prior-year period to $138.40 million.
The consensus EPS estimate for fiscal 2022 reflects a 58% improvement year-over-year. The consensus revenue estimate of $67.50 million for the same year indicates a 98% increase from the prior year.
The stock has gained 12.9% over the past three months to close Friday’s trading session at $2.10. It has gained 79.5% over the past month.
The Wall Street analyst that rated BKSY has rated it Buy. The 12-month median price target of $6.00 indicates a 185.7% potential upside.
Astra Space, Inc. (ASTR)
ASTR is a designer, tester, and manufacturer of space products and services. The company designs, manufactures, and operates propulsion modules to enable satellites to orbit in space. It primarily serves satellite operators and manufacturers, and government agencies.
In April, ASTR and LeoStella LLC, a satellite design and manufacturing company, declared a contract for providing multiple Astra Spacecraft Engines for LeoStella satellites. The company is expected to begin delivering propulsion systems from this year and into 2023.
Earlier in March, ASTR and premier launch services provider Spaceflight Inc. announced a multi-launch contract. The agreement offers Spaceflight with launch opportunities using ASTR’s launch services through 2025.
In the first quarter ended March 31, ASTR’s revenue was reported to be $3.91 million. The company’s cash and cash equivalents balance came in at $161.52 million, up 616.3% from the prior-year quarter. Net cash provided by financing activities stood at $471 thousand.
Analysts expect ASTR’s revenue for the year 2023 to be $110.18 million, indicating a 453.3% year-over-year growth. Street expects EPS to increase 35.2% year-over-year for the same year.
The stock has declined 6.5% intraday to close Friday’s trading session at $2.02.
The Wall Street analyst rating ASTR has rated it Buy. The 12-month median price target of $6.00 indicates a 197% potential upside.
Planet Labs PBC (PL)
PL engages in the construction, design, and launch of satellite constellations, providing geospatial data through an online platform. The company’s offerings include Open Geospatial Consortium, a cloud-native proprietary technology, and serves agriculture, mapping, and government bodies.
On May 25, the company announced that its subsidiary Planet Labs Federal, Inc., was awarded an EOCL contract by the National Reconnaissance Office (NRO). Robbie Schingler, Planet’s co-founder and Chief Strategy Officer, said, “Planet has been proud to partner with the US government for many years, and the EOCL award is the next giant leap in our work together."
Earlier in the same month, PL announced the availability of their PlanetScope data through agriculture data infrastructure company Leaf. Leaf customers are expected to access PL’s PlanetScope data that provides daily imaging of each location at about three-meter resolution.
For the fourth quarter ended January 31, PL’s revenue increased 22.7% year-over-year to $37.15 million. Non-GAAP gross profit grew 100.7% from the prior-year period to $15.49 million. For the fiscal year ended January 31, the company’s cash, cash equivalent, and restricted cash balance improved 549.1% from the prior year to $496.81 million.
Street revenue estimate of $181.26 million for the fiscal year ending January 2023 reflects a growth of 38.1% year-over-year. Analysts expect its EPS to increase 71.9% year-over-year in the current year.
Over the past month, PL’s stock has gained 21% and 9.2% over the past three months to close Friday’s trading session at $5.13.
The two Wall Street analysts rating PL rated it Buy. The 12-month median price target of $13.75 indicates a 168% potential upside. The price targets range from a low of $10.50 to a high of $17.00.
BKSY shares were trading at $1.92 per share on Monday afternoon, down $0.18 (-8.57%). Year-to-date, BKSY has declined -57.24%, versus a -19.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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