3 Space Stocks with More Than 40% Upside Potential, According to Wall Street

The space industry achieved monumental growth in 2021, with several start-ups launching commercial space flights. In fact, 2021 might be dubbed a landmark year for space exploration in historical terms. Private-sector investments in space infrastructure companies hit a record $14.50 billion in 2021, up 50% year-over-year, according to New York-based firm Space Capital. Moreover, total space investment accounted for 3% of total global venture flows last year.

The trend will likely continue over the long term. According to NSR’s Global Space Economy Report, the space industry is projected to grow at a 6.3% CAGR to more than $1.25 trillion in revenues by 2030. In addition, the Satellite and Space Infrastructure market is expected to generate more than $570 billion in revenues by 2030.

Given these factors, Wall Street analysts expect space stocks Kratos Defense & Security Solutions, Inc. (KTOS), Maxar Technologies Inc. (MAXR), and Astra Space, Inc. (ASTR) to rally in price in the coming months.

Kratos Defense & Security Solutions, Inc. (KTOS)

KTOS in San Diego, Calif., is a government contractor of the U.S. Department of Defense. It operates through two segments: Krotos Government Solutions; and Unmanned Systems. It specializes in unmanned systems, directed-energy weapons, satellite communications, missile defense, cyber security, and warfare.

Last month, KTOS and Kymeta, a communications company, formed a strategic partnership to develop products and solutions that integrate advanced mobile satellite antenna technologies with software-defined ground systems. The partnership is expected to advance digital transformation and future capabilities of terrestrial and space-based networks through the Digitally-Transformed Remote Terminal.

Also in January, KTOS and Hypersonix Launch Systems, an Australian Aerospace Engineering company, signed an agreement to launch the DART AE multi-mission hypersonic drone technology demonstrator. With this innovative joint project launch, KTOS targets new markets and should increase its  revenue streams.

KTOS’s total gross profit increased 6.1% year-over-year to $60.60 million in its  fiscal third quarter, ended Sept. 26, 2021. KTOS’ government solutions operating income rose 3.5% year-over-year  to $14.60 million.

The $208.40 million consensus revenue estimate for its fiscal fourth quarter, ended Dec. 31, 2021, represents  1% year-over-year growth. The $0.09 consensus EPS estimate for the fiscal fourth quarter indicates 12.8% year-over-year growth from the same period in 2020.

The stock has increased 5.2% in price over the past five days to close yesterday’s trading session at $17.03.

Of the six Wall Street analysts that rated KTOS, three rated it Buy, while three rated it Hold. The 12-month median price target of $23.50 indicates a 40% potential upside. The price targets range from a low of $19.00 to a high of $30.00.

Maxar Technologies Inc. (MAXR)

Vancouver, Canada-based MAXR is a space technology company. It provides earth intelligence and space infrastructure solutions in the U.S. and internationally. The company operates through two segments: earth intelligence; and space infrastructure. It specializes in manufacturing communication, earth observation, radar, satellite products, and related services.

Last December, MAXR extended agreements with three long standing international defense and intelligence customers. The contracts amount to more than $100 million and allow customers to access advanced Earth-imaging satellites with encrypted downlinks under Maxar’s Direct Access Program. The agreements are expected to boost MAXR’s revenues.

In its  fiscal 2021 third quarter, ended Sept. 30, MAXR’s revenues increased marginally year-over-year to $437 million. Its  operating income rose 428.6% year-over-year to $37 million. And the  company’s total adjusted EBITDA rose 0.9% from the same period last year to $113 million.

Analysts expect MAXR’s revenue for its fiscal first quarter, ending March 31, 2022, to come in at $443.56 million, representing a 13.2% rise year-over-year.

Over the past five days, MAXR has gained 7.1% in price. Of four Wall Street analysts that rated MAXR, two rated it Buy, while two rated it Hold. The 12-month median price target of $37.25 indicates a 41.7% potential upside from yesterday’s closing price of $26.29. The price targets range from a low of $32.00 to a high of $42.00.

Astra Space, Inc. (ASTR)

ASTR is the first space launch company publicly traded on the Nasdaq stock exchange. The Alameda, Calif.-based concern designs, tests, manufactures, and operates space and satellite launch services that enable global communications, weather monitoring, earth observation, navigation, and surveillance capabilities.

Last month, ASTR announced that it was awarded the Venture-Class Acquisition of Dedicated and Rideshare (VADR) launch services Indefinite Delivery/Indefinite Quantity (IDIQ) contract by NASA. The contract has a total value of $300 million with a five-year ordering period. This contract is expected to allow ASTR to deliver cost-effective and rapid access to the launch system.

Last December, ASTR announced plans to launch its first satellite into orbit for the National Aeronautics and Space Administration (NASA) from Cape Canaveral in January 2022. The launch was live-streamed in partnership with NASASpaceFlight. “Launching out of the Cape allows us to serve customers with mid-inclination delivery needs, broadening our market. This is an additional step in our global spaceport strategy and positions us to serve the broad low earth orbit (LEO) market," said Martin Attiq, Chief Business Officer at ASTR.

ASTR’s cash and cash equivalents increased 3468.5% over nine months ended Sept.30, 2021, to $378.65 million. The company’s total assets grew 1377.5% over nine months to $530.30 million.

Analysts expect ASTR’s revenue for its fiscal year 2022 to come in at $26.63 million, representing a 1180.3% rise year-over-year.

Over the past five days, the stock has increased 15.9% in price to close yesterday’s trading session at $5.02. The 12-month median price target of $7 indicates a 39.4% potential upside.

KTOS shares were trading at $16.80 per share on Wednesday afternoon, down $0.23 (-1.35%). Year-to-date, KTOS has declined -13.40%, versus a -3.93% rise in the benchmark S&P 500 index during the same period.

Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.

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