Intuitive Machines stock soars 50% on $5 billion NASA deal: Is It too late to invest?

Intuitive Machines Inc (NASDAQ: LUNR) saw a dramatic 50% surge in its stock price today following the announcement of a groundbreaking $5 billion space network contract with NASA.

This major deal, signed on Wednesday, represents a significant boost for the space exploration company and highlights its growing role in space missions.

Despite this impressive rally, potential investors are left questioning whether the stock's rapid ascent means it’s too late to get in.

Intuitive Machines stock: profitability concerns

The new five-year contract with NASA, which includes the possibility of a five-year extension, is a major endorsement of Intuitive Machines’ capabilities and prospects.

According to Cantor Fitzgerald analyst Andres Sheppard, the contract validates the company’s outlook and its ability to secure additional contracts.

This positive news follows a successful lunar mission completed by Intuitive earlier this year, and the stock has surged an impressive 150% over the past six weeks.

Despite the upbeat news, concerns about profitability loom large. Intuitive Machines is currently trading at approximately 3.5 times its price at the beginning of 2024.

The company reported a $28 million operating loss for the second quarter of 2024, significantly higher than the $9 million loss that analysts had anticipated.

With projections estimating a $68 million loss for this year and an additional $10 million in 2025, profitability is not expected before 2026.

Moreover, Intuitive Machines does not offer dividends, making it less attractive for income-focused investors.

LUNR share price may remain volatile

Intuitive Machines concluded the second quarter with just under $32 million in cash, which analysts believe will cover operations for approximately 12 more months.

This could mean the company might need to raise capital through stock sales, potentially diluting existing shareholders’ stakes.

On the upside, Wall Street analysts continue to rate Intuitive Machines as a "buy," with an average target price of $9.80, suggesting a potential further gain of about 10%.

The stock previously traded at $11 after its first lunar mission in February, and the new NASA contract further supports the company’s technological advancements.

Whether to invest in Intuitive Machines now depends on individual risk tolerance.

The stock’s recent surge and ongoing contract wins underscore its potential but also come with significant risks and volatility.

As a speculative investment, it may offer high rewards but also poses substantial uncertainties moving forward.