Why Intuitive Machines Stock Soared by Nearly 73% in May

Intuitive Machines (NASDAQ: LUNR) stock felt as if it had been lifted into orbit last month. The company's shares rose by nearly 73%, due to both internal and external factors. These included, but were not limited to, the surge of interest in space stocks due to the initial public offering (IPO) regulatory filing by the Elon Musk-led SpaceX.

Lifting off like a rocket

Even before the blast of free publicity generated by that filing, Intuitive was having a good May. On May 12, it announced via X (formerly Twitter) that it will participate in Andromeda, a huge program from the U.S. Space Force. Specifically, it is to design and implement cutting-edge space domain awareness (SDA) capabilities. These will be used to detect and track objects in geosynchronous orbit (i.e., orbit in sync with the Earth).

Image source: Getty Images.

The military branch's space systems command (SSC) is running the sprawling program, and Intuitive is one of 14 vendors awarded indefinite delivery/indefinite quality (IDIQ) contracts within it.

Two days later, Intuitive took the wraps off its first quarter results. The company missed analyst estimates on both the top and bottom lines, yet the earnings report included several bright spots to help sustain Mr. Market's optimism. Among these was a near tripling of revenue on a year-over-year basis, and a reaffirmation of estimates-topping sales guidance.

Despite the double miss, several pundits tracking Intuitive's stock published bullish post-earnings updates on its prospects. One in this group was Austin Moeller of Canaccord, who raised his price target on the shares to $41 from $24 while maintaining his buy recommendation. Ditto for B. Riley's Mike Crawford; his change wasn't so dramatic (to $45 from $40), still he also held fast to his buy rating.

Also on earnings day, Intuitive announced the latest in a lengthening series of acquisitions. It divulged that it's buying a pair of related space businesses, Goonhilly Earth Station and Goonhilly USA. Investors took the company to heart when it wrote that the combined deal "significantly expands global ground station resources and capacity on Intuitive Machines' integrated space-to-ground network."

Intuitive said it is paying just over $49 million in cash and stock for the Goonhillys. It added the acquisitions were expected to close in the third quarter of this year.

The SpaceX effect

Finally, toward the end of the month, SpaceX's S-1 filing landed with all the impact and drama of a long-awaited space capsule thundering down to Earth. The company is aiming to notch an all-time record for IPO proceeds, potentially securing a $2 trillion valuation.

That lit quite the burner under space stocks generally, not least because there are few of them relative to other sectors such as tech or pharmaceuticals. Since Intuitive is one of the more proven companies in this still comparatively speculative industry, it received quite a boost, and exited the month with many investors full of hope about its future.

I think Intuitive is well placed to capitalize on the new Space Age that seems to be ramping up. It's a popular stock these days, but like many hot titles we've seen over the years, the broader industry lift could send it well higher. It's looking very much like a buy now.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Machines. The Motley Fool has a disclosure policy.