Why space stocks like Planet Labs, Rocket Lab, and LUNR are surging this year

Top space-related stocks are in a strong bull run this year, helped by the elevated demand from retail and institutional investors. Planet Labs (NASDAQ: PL), Rocket Lab (NASDAQ: RKLB), and Intuitive Machines NASDAQ:LUNR have all jumped by either double or triple digits this year.

RKLB, PL, and LUNR have jumped ahead of the SpaceX IPO

LUNR has jumped by 110%, while PL is up by 106%. RKLB stock has soared by over 80%. They have all become multi-billion dollar entities, with Intuitive Machines having a market capitalization of $8.3 billion, and RKLB and PL being valued at $79 billion and $15 billion.

The ongoing momentum is mostly because of the upcoming SpaceX IPO, which will value the company at over $1.5 trillion. It will be the biggest IPO ever and has pushed investors to companies in the industry. Indeed, data shows that the recently launched Tema Space Innovators ETF (NASA) has gained over $1.7 billion in assets a few months after its launch.

It is common for companies in a given industry to do well whenever there is a major event in the sector. For example, most AI stocks have surged this year as investors anticipate the upcoming OpenAI and Anthropic IPOs.

Space companies are reporting strong numbers

Internally, these companies have published strong numbers as the number of launches have jumped. For example, Rocket Lab said that it made 31 launches in the first quarter, with its backlog hitting 70. As a result, its revenue jumped to over $200 million in the first quarter from $122 million in the same period last year.

Most importantly, analysts expect its revenue growth to continue. The average estimate is that its revenue will soar by 51% this year, followed by 40% in the following one. It will likely cross the $1 billion revenue milestone this year.

Planet Labs is also seeing strong growth this year, with its revenue rising to $86.8 million from $61.5 million in the same period last year. Analysts expect its revenue will soar by 38% this year to $427 million, followed by $567 million next year. 

Intuitive Machines, on the other hand, is expected to make over $947 million in revenue this year, up by 351% YoY. It will then make $1.12 billion in revenue in the coming year.

Therefore, in addition to the much-anticipated SpaceX IPO, these companies are seeing robust organic growth. This trend will likely continue as analysts believe that we have not scratched the surface in the space industry.

Still, these space stocks face a major risk. The first one is that they are all losing millions of dollars, a trend that may continue in the future. This is important as these companies have become highly overvalued.

The other risk is that they may experience a “buy the rumor, sell the news” situation. This is where an asset jumps ahead of a major event and then retreat once it happens. In this case, they have pumped ahead of the SpaceX IPO and may retreat when it happens.