Why Firefly Aviation's Stock Was Nose-Diving This Week

Key Points

• The space company published its first set of earnings as a publicly traded company.

• It's a very recent arrival to the market, with its shares first trading after their early August IPO.

• 10 stocks we like better than Firefly Aerospace ›

Firefly Aviation (NASDAQ: FLY), a space stock that arrived recently to the market, was plummeting over the past few trading sessions. According to data compiled by S&P Global Market Intelligence its price was down by almost 17% week to date as of Friday before market open.

The finger of blame can be pointed directly at the company's latest set of quarterly results. These were dispiriting enough that even a subsequent bullish analyst note couldn't get Firefly buzzing again.

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Not quite an encouraging start

At least the second-quarter report Firefly published after market close on Monday was historic -- it was the company's first set of earnings since its initial public offering (IPO) early last month.

Image source: Getty Images.

A milestone it may be, but the report wasn't otherwise impressive for many investors. The period saw Firefly's revenue dive by nearly 16% year over year to $15.5 million. A more than doubling of launch revenue across that stretch to $6.3 million was a positive development for sure. However, the company's other revenue source (spacecraft solutions) dropped significantly across that stretch.

The bottom line followed a similar trajectory. Firefly's net loss deepened in the quarter, coming in at nearly $64 million, against the deficit of $53 million and change in the year-ago frame.

A bull among the bears

The market's sell-off was fairly aggressive, although not every Firefly watcher was down on the company. On Tuesday Cantor Fitzgerald analyst Colin Canfield felt compelled to reiterate his buy recommendation on the stock in a new research note, and his $65-per-share price target.

According to reports, Canfield wrote that as a space company, Firefly is subject to the inherent volatility of its business (it is mission- and project-dependent, after all). Meanwhile, he sees opportunity for the company in rising defense budgets from potential clients.

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Eric 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 a disclosure policy.