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 – Get Rating), Maxar Technologies Inc. (MAXR – Get Rating), and Astra Space, Inc. (ASTR – Get Rating) to rally in price in the coming months.

Kratos Defense & Security Solutions, Inc. (KTOS – Get Rating)

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 – Get Rating)

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…

 

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