Should You Buy Intuitive Machines While It's Below $22?

Space exploration has evolved dramatically since the first satellites were launched in the late 1950s.

Once dominated by governments, it has shifted to the private sector, with companies like SpaceX and Blue Origin leading the charge. Private investments have made space travel more affordable and accessible and opened up a universe of opportunities for research and exploration outside our planet.

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One upstart helping lead the way in space research is Intuitive Machines (NASDAQ: LUNR). The young company made waves last year when it completed its first Moon mission with its lunar lander. This opens up future research opportunities where the company could lead the way.

With the global space economy projected to reach $1.8 trillion by 2035, according to the consultancy McKinsey, Intuitive looks to carve out a spot in the burgeoning industry. Here's what investors need to know about the exciting space company.

It has won major contracts to advance lunar exploration

Last year was a huge one for Intuitive. In February, the company completed its first lunar mission (called IM-1) with its Nova-C lunar lander, Odysseus. This mission aimed to soft-land Odysseus on the Moon and collect scientific data for its customers. This was a major milestone, as it was the first lunar landing of any American-made spacecraft since 1972 and the first commercial spacecraft to do so.

This mission is part of NASA's more extensive Commercial Lunar Payload Services program and helped validate Intuitive's technology, which has been under development since its founding in 2013. Following the successful mission, NASA awarded the company a $30 million deal as a prime contractor to build a lunar terrain vehicle, which would enable astronauts to travel on the Moon's surface to conduct further research.

That was just the beginning. In August, NASA awarded it a $116.9 million contract to deliver six science and technology payloads to the Moon's south pole as part of the IM-4 mission.

In September, the company won a Near Space Network (NSN) contract with a maximum potential value of $4.82 billion over the next 10 years. As part of the agreement, management said, it "will deploy lunar relay satellites and provide communication and navigation services that play an essential role in NASA's Artemis campaign to establish a long-term presence on the Moon."

"This contract marks an inflection point in Intuitive Machines' leadership in space communications and navigation," CEO Steve Altemus said.

Here's what's next for Intuitive Machines

The company is gearing up for its upcoming IM-2 mission, which is set to be launched in the first quarter and is targeted for around Feb. 27. This mission will use its Nova-C lunar lander to reach the Moon's south pole.

IM-2 will mark the first demonstration of on-site resource utilization on the lunar surface. It will employ a drill and mass spectrometer to analyze the volatile content in subsurface materials, focusing on measuring lunar water ice. Importantly, it aims to provide the first assessment of hydrogen levels in the permanently shadowed regions (PSR), a crucial indicator of water presence.

An artist's rendering of Intuitive Machines' Nova-C lunar lander. Image source: Intuitive Machines.

Following this step, the IM-3 mission will aim to deliver payloads to a specific area on the Moon, notably the lunar swirl in the Reiner Gamma region. It anticipates the launch to occur sometime in 2026.

Is Intuitive Machines' stock a buy?

The NASA contract awards to Intuitive Machines are a big deal because space exploration is such a large aspect of it. They help validate the company's technology and show that the space agency is pleased with the progress the company is making, hence the expanded long-term agreements.

In the third quarter, the company reported a substantial backlog of $316.2 million, an increase from $213 million in the prior quarter. This backlog represents the anticipated revenue from awarded contracts that it expects to deliver in the future, and it highlights the strong demand for its services. This growth in backlog indicates a promising outlook for Intuitive as it continues to secure contracts and expand its market presence.

Because it is still a growing young company, investing in Intuitive Machines comes with added risk, especially if there are any setbacks with its missions. Analysts covering it project revenue could grow 61% in 2025, while earnings per share could improve from negative $2.27 to negative $0.12. Profitability is projected to come by 2026.

Given its progress last year, coupled with a growing backlog and expanded NASA contracts, Intuitive Machines looks like an appealing stock in the growing space economy. For that reason, I think it's a solid buy today for growth-focused investors with a long investment horizon.

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Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.