With huge NASA contract, Intuitive Machines closer to becoming 'preeminent lunar infrastructure player', says analyst

By James Rogers

Space-exploration company Intuitive Machines has been awarded a NASA contract worth up to $4.82 billion

The award of a NASA contract worth up to $4.82 billion has cemented Intuitive Machines Inc.'s position as a key partner in the space agency's ambitious plans for lunar exploration, according to analyst firm Benchmark.

Late Tuesday, Intuitive Machines (LUNR) announced that NASA had awarded the company the Near Space Network contract for communication and navigation services for missions in the near-space region, which extends from Earth's surface to beyond the Moon.

"With the +$4B NSN win, LUNR has established itself as the backbone of lunar data transmission," wrote Benchmark analyst Josh Sullivan, in a note Wednesday. The win also has significant long-term financial and strategic implications for Intuitive Machines' space infrastructure ambitions, according to Benchmark. "LUNR has long pointed the three pillars for commercializing the moon or any celestial body, including: delivery (ability to land equipment safely), data transmission, and autonomous operations," Sullivan wrote. Benchmark maintained its buy rating and $10 price target for Intuitive Machines.

Related: Intuitive Machines' stock soars, boosted by NASA contract worth up to $4.82 billion

Intuitive Machines shares ended Wednesday's session up 38.3%, registering their biggest gain since Feb. 20, when the stock rose 50.1%. The stock is up 2.4% in premarket trades Thursday. Intuitive Machines shares are up 192.4% in 2024, outpacing the S&P 500 index's SPX gain of 17.8%.

The contract has a base period of five years with an additional five-year option period, with a maximum potential value of $4.82 billion, according to a statement released by Intuitive Machines.

Benchmark's Sullivan notes that Intuitive Machines has already won part of the Lunar Terrain Vehicle contract. Earlier this year NASA awarded the space-exploration company a $30 million contract to complete a feasibility roadmap for the LTV rover using Intuitive Machines' Nova-D lunar lander.

Related: Intuitive Machines' stock surges, boosted by $30 million NASA lunar rover contract

Intuitive Machines' IM-1 mission made history earlier this year when the company's Odysseus lander became the first commercial lander to successfully land on the moon's surface. IM-1 was the first of three missions to the moon as part of NASA's Commercial Lunar Payload Services (CLPS) initiative to deliver science and technology to the moon's surface. The company expects to ship its next moon lander to its launch site in the fourth quarter, with the launch window for the IM-2 mission extending through the first quarter of 2025. The third flight, IM-3, which will land at the moon's Reiner Gamma region, is expected to launch in the fourth quarter of 2025.

"NASA clearly views LUNR's heritage as elite given NSN, LTV, and IM missions," wrote Benchmark's Sullivan. "However, NSN also provides significant backlog and long-term financial stability, something many space peers lack. LUNR's path to becoming the preeminent lunar infrastructure player took a big step forward with NSN."

Commercial moon landings are considered important scouting missions for NASA's Artemis moon-exploration program. Earlier this year, NASA said it is targeting September 2025 for its first crewed Artemis mission around the moon, and September 2026 for its Artemis mission to land astronauts near the lunar south pole.

Related: Intuitive Machines targets early 2025 for next moon launch

All of the six analysts surveyed by Factset have a buy rating for Intuitive Machines.

-James Rogers

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09-19-24 0730ET

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