Why York Space Systems Stock Crashed Again Friday
Key Points
York Space Systems beat on sales but missed on earnings in Q2.
York also missed on earnings in Q1 -- and now it's lowering guidance for the year.
- 10 stocks we like better than York Space Systems ›
York Space Systems (NYSE: YSS) stock, which held a successful IPO back in February, is looking significantly less successful this morning. Shares of the satellite manufacturer crashed 11.2% through 12:35 p.m. ET Friday after missing for the second time in a row on an earnings report.
Analysts had forecast York to report $0.12 per share in losses on $93.9 million in sales in Q2. In fact, York reported last night that its losses were $0.31 per share, despite strong sales of $92.6 million.
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York Space Q2 earnings (er, losses)
York showed modest sales growth in Q2 -- up 10% year over year. It reported better news on profits, with gross profit more than doubling year over year, and a gross profit margin of 24%. Net losses still grew 62%, however.
Accentuating the positive, CEO Dirk Wallinger highlighted the company's 88% win rate when competing for new contracts this year, its $592 million in contracted backlog -- and its potential to triple this backlog to $1.85 billion if options are exercised on existing orders.
What's next for York Space stock
So York's doing well at winning contracts -- just not at profiting from them. With luck, though, this will change as time goes by.
Wallinger described how the U.S. government is changing how it awards space contracts, taking longer to choose companies to participate in indefinite delivery, indefinite quantity (IDIQ) contracts, but then awarding the winners follow-on "task orders" more rapidly. That's why the "$1.85 billion" number might prove more important than the $592 million in contracted backlog.
The bad news? Turning to guidance, York lowered its 2026 revenue projection to a range of $375 million to $405 million.
Just because the government can award additional work to York doesn't mean it will.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends York Space Systems. The Motley Fool has a disclosure policy.
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