Intuitive Machines Surges 56% in a Year: How to Play the Stock Now?

Intuitive Machines, Inc.’s LUNR shares have surged a solid 55.5%% over the past year, surpassing the Zacks Aerospace-Defense industry’s growth of 3.4%. It has also outperformed the broader Zacks Aerospace sector’s rise of 7.7% as well as the S&P 500’s return of 8.3% in the same period. LUNR rides on its well-established position as a provider of lunar space products and services, along with the growing program funding from the U.S. government for space exploration.

Other industry players, such as Rocket Lab USA RKLB and TransDigm Group TDG, have also delivered stellar performances, with their shares surging a solid 502.9% and 11.8%, respectively, over the past year.

With LUNR riding high, investors interested in space stocks may consider adding it to their portfolio. However, before making any hasty decision, it would be prudent to take a look at the reasons behind the surge, the stock’s growth prospects as well as risks (if any) to investing in the same. The idea is to help investors make a more insightful decision.

What Pushed LUNR Stock Up?

With investments in the space economy, both from governments and private concerns like SpaceX, having increased significantly over the past decade, stocks like Intuitive Machines are performing well on the bourses. This can be attributed to the frequent contracts clinched by LUNR leveraging its expertise in manufacturing space products and offering space services, and its innovation in space technologies.

Evidently, in March 2025, LUNR’s IM-2 mission lunar lander, Athena, landed on the Moon, registering the company’s second operational lunar mission. In January, Intuitive Machines secured a study contract from NASA to advance lunar logistics handling and offloading, and surface cargo and mobility.  

Earlier, in December 2024, the company clinched additional contracts from NASA’s Near Space Network for Direct-to-Earth services. These demonstrate the achievements of LUNR in capitalizing on the growth opportunities of the expanding commercial lunar economy, which, in turn, must have boosted its share price over the past year. 

Is LUNR Stock’s Growth Sustainable?

The space economy, projected to reach $1.8 trillion by 2035 (World Economic Forum, April 2024), offers substantial opportunities for innovation and expansion. Against this backdrop, Intuitive Machines is well-positioned for growth in the space exploration industry, supported by significant investments from the U.S. government and the private sector. Notably, LUNR is currently working on its largest lander, the Nova-M, designed to transport 5,000-7,500 kilograms of payload to the Moon’s surface. Upon launch, this innovation is expected to generate robust revenues.

Additionally, Intuitive Machines ended 2024 with a healthy backlog of $328.3 million, registering growth of 22% year over year and marking the highest backlog in the company’s history. This growing backlog reflects solid revenue-generation potential and underpins future earnings growth. As space exploration continues to thrive, Intuitive Machines is well-poised to capitalize on these expanding market opportunities.

A sneak peek at its estimates mirrors a similar picture.

Estimates for LUNR

The Zacks Consensus Estimate for LUNR’s first-quarter 2025 revenues implies a decline of 18.7% from the prior-year quarter’s level, while that for full-year 2025 indicates 19.2% growth. 

The estimated figure for first-quarter and full-year 2025 loss indicates a solid improvement. However, the downward revision in the company’s 2025 and 2026 bottom-line estimates indicates analysts’ declining confidence in the stock.

LUNR Stock’s Premium Valuation

LUNR stock is not at all cheap, as its Value Score of F suggests a stretched valuation at this moment.

Moreover, its forward 12-month price-to-sales (P/S) is 4.92X, a premium to its peer group’s average of 3.78X. This suggests that investors will be paying a higher price than the company's expected sales growth compared to that of its peers. The company’s forward P/S also looks stretched when compared to the median of its one-year range, 3.83.

LUNR’s Price/Sales Ratio (F12M)

Its industry peers, TransDigm and Rocket Lab, are also trading at a premium to the peer group. While TDG’s forward 12-month P/S is 15.38X, RKLB is trading at a forward 12-month P/S of 8.44.  

Risks to Consider Before Selecting LUNR

Despite the aforementioned growth opportunities, LUNR currently faces certain challenges, which one should consider before investing in the stock. One such challenge is that the company is still in the preliminary stages of developing its full space infrastructure. If it fails to demonstrate the reliability of its products and services through a successful lunar landing or delays completing specific space missions, its results of operations might suffer.

Moreover, the company faces industry-specific headwinds like the shortage of skilled labor, which might lead to a failure in finishing its products within the scheduled time. This might hurt its revenues. Its industry peers, TDG and RKLB, are also facing the shortage of skilled labor issue.

Final Thoughts

To conclude, investors should refrain from adding LUNR stock to their portfolio right now, considering its premium valuation and downward revision in its earnings estimate. The stock has a VGM Score of F, which is also not a favorable indicator of strong performance. 

LUNR currently carries a Zacks Rank #5 (Strong Sell), which further supports our thesis.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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