Why Did Firefly Aerospace Stock Fall in September?

Key Points

• Firefly Aerospace recently held its initial public offering in August.

• Investors bid the stock higher immediately, but Firefly's weak second-quarter 2025 financial results have contributed to the stock's recent decline.

• With shares sinking, investors may want to wait before clicking the buy button on Firefly stock.

• 10 stocks we like better than Firefly Aerospace ›

With its initial public offering (IPO) completed on Aug. 7, Firefly Aerospace (NASDAQ: FLY) stock launched into the stratosphere, climbing as much as 56% during its first day as a public company.

In September, however, the stock has fallen down to earth and is now more than 35% below its IPO price of $45. Let's see why investors are no longer over the moon about the first commercial company to land on the lunar surface.

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Image source: Getty Images.

After an initial flash of excitement, reality has set back in

Despite the market's exuberance for Firefly stock immediately after its IPO, investor interest in the space stock has trended consistently lower this month.

September began with uninspiring Wall Street views on Firefly stock. Noah Poponak, an analyst at Goldman Sachs, assigned a neutral rating to Firefly stock with a $54 price target. Poponak believes Firefly has a "differentiated product in a supply constrained" industry, yet he notes that Firefly is unprofitable and doesn't generate free cash flow.

Similarly, Morgan Stanley analysts assigned an equal weight rating with a $52 price target, and Deutsche Bank assigned a neutral rating and a $45 price target.

Firefly's second-quarter 2025 financial results also sent shares lower. In addition to posting $15.5 million in revenue -- a 26% year-over-year decrease -- Firefly reported a net loss of $63.8 million, a 19% decrease from the $53.5 million net loss it reported in Q2 2024.

And lastly, Firefly ended the month on a tragic note, as it reported a setback during the testing of its Alpha rocket on Sept. 28.

Since Firefly is glowing less brightly in investors' eyes, is now a good time to buy?

The volatility in Firefly stock is unsurprising, given that its IPO was held so recently. Although it's cheaper now, there's still uncertainty around how to price this unprofitable company, so investors may want to watch from the sidelines for the time being. Fortunately, there are plenty of other space stocks to consider at the moment for those committed to gaining space industry exposure.

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Scott Levine 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 a disclosure policy.