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The shares of a space company Intuitive machines (NASDAQ: LUNR) vigorously defied gravity on Thursday. It ended the day more than 24% higher, thanks in no small part to news of a major price target increase from an analyst. That move came just days after the company delivered the best news it has ever reported.
Excited about NASA’s moon contract
The increase was determined by B. Riley‘s Mike Crawford, who now believes that Intuitive Machines’ fair value should be significantly higher. He increased his offer by 50%, from the previous $8 to $12 per share, and maintained the existing buy rating. The new one price target expects a 29% increase at the stock’s most recent closing price.
It’s not hard to be optimistic about Intuitive Machines these days. On Tuesday, the company was selected by the National Aeronautics and Space Administration (NASA) as the only company to have one communication system between our planet and the moon.
In the grand tradition of major federal contracts, this contract is potentially worth quite a bit of money. All told, the scheme, which will be in place for five years with an option to extend for up to 10 years, could pay out as much as $4.8 billion for the committed services.
A surprising solo selection
Crawford did not expect Intuitive Machines to be the sole winner of the contract; he expected that one or two other providers would also be selected for the NASA project. This reinforced his impression that the ambitious company is “rapidly establishing itself as a full-service space exploration company poised to capture hundreds of millions of dollars in high-margin services revenues, enabling a long tail of robust free cash flow generation.” .”
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Erik Volkman 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 one disclosure policy.
Why shares of Intuitive Machines shot up 24% on Thursday was originally published by The Motley Fool