Why Firefly Aerospace Stock Zoomed 26.3% Higher Last Month
Key Points
A rumor of a SpaceX IPO drove space stocks higher. Firefly Aerospace also joined the Russell 2000 Index.
The company is growing quickly but losing a lot of money.
The stock looks overvalued when you compare its current revenue to market capitalization.
- 10 stocks we like better than Firefly Aerospace ›
Shares of Firefly Aerospace (NASDAQ: FLY) shot up 26.3% in December, according to data from S&P Global Market Intelligence. The stock is performing well due to recent bullish sentiment surrounding space stocks, specifically in anticipation of a potential SpaceX IPO, as well as its inclusion in new stock indices.
The space flight upstart is small, growing quickly, and highly unprofitable. Here's why it rocketed higher in the month of December.
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Space economy bullishness
Firefly Aerospace has only recently completed its own IPO, making its market debut in August 2025. Since then, the stock has generally fallen. This often happens to many IPO stocks.
However, sentiment began to turn a corner in late November and December of last year. One factor may have been the rumored SpaceX IPO in 2026, which could value the start-up at $1.5 trillion and raise tens of billions in capital. This made everyone bullish on the entire space sector, of which Firefly Aerospace is a part.
The stock was also added to the Russell 2000 Index. Index inclusion does not impact the underlying Firefly Aerospace business, but some investors take it as a bullish signal that index funds will begin buying up shares. After the announcement, Firefly Aerospace began to trade higher.
Firefly's business results have been chaotic as a fast-moving start-up in the space flight arena. Its revenue was up 38% year-over-year last quarter to $31 million, but with major operating losses as it builds out capabilities. The company offers launch, orbit, and mission systems, working on the recent lunar exploration Blue Ghost Mission as one of the key contractors.
Image source: Getty Images.
Time to buy Firefly Aerospace?
With the stock trending higher again, Firefly Aerospace now has a market cap of $4.36 billion. This is a significant premium to its revenue guidance for 2025 of $150 million-$158 million. Space companies have low margins, meaning that even if Firefly scales up its operations, it will likely still generate a small amount of gross profit and bottom-line earnings.
It faces major competition from SpaceX, Blue Origin, and Rocket Lab for missions, along with legacy providers. There is a lot of money to be made in the fast-growing space economy, but it is not guaranteed to go to this tiny start-up. This makes Firefly Aerospace stock very risky to buy at current prices.
Should you buy stock in Firefly Aerospace right now?
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
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