Intuitive Machines (NASDAQ: LUNR) shares have skyrocketed 491% year to date at the time of this writing, dwarfing the S&P 500's 25% gain. Moreover, my modest position, initiated just weeks ago in my Roth IRA, is already up by a healthy 76.8%.
While such gains typically trigger profit-taking, several developments suggest this lunar pioneer's story is just beginning to unfold. Read on to find out more about this incredible space stock.
Image source: Getty Images.
Building the Moon's first infrastructure network
For the quarter ended Sept. 30, 2024, Intuitive Machines demonstrated remarkable execution. Revenue soared 359% year over year to $58.5 million, while year-to-date revenue of $173.3 million has already doubled 2023's full-year results. The company achieved positive gross margins of $4.1 million and ended the quarter with $89.6 million in cash -- its highest balance ever.
What sets Intuitive Machines apart is its dominance in NASA's Commercial Lunar Payload Services (CLPS) program. The company secured its fourth CLPS contract earlier this year worth $116.9 million -- more than any other vendor.
This leadership in lunar delivery provides a foundation for the company's broader infrastructure ambitions through its three-pillar strategy: delivery, data transmission, and autonomous operations. These pillars work together to create a comprehensive lunar presence that could transform space exploration and commerce.
A game-changing NASA contract
The real catalyst came on Sept. 17, 2024 when NASA named Intuitive Machines the sole awardee of a Near Space Network contract worth up to $4.82 billion. Beginning Oct. 1, 2024, this five-year agreement (with a five-year option) positions the company to provide critical communication and navigation services from Earth to beyond the Moon through its planned satellite constellation.
The contract introduces an innovative pay-by-the-minute service model, creating the potential for subscription-like recurring revenue. Adding fuel to the fire, a new partnership signed earlier this month with Johns Hopkins Applied Physics Laboratory further strengthens the company's technological capabilities in this crucial domain of lunar commercialization.
The Johns Hopkins partnership specifically targets advancement in safe, secure, and reliable lunar communications infrastructure in cislunar space -- the region extending from Earth's gravitational influence to the Moon's surface. This collaboration could accelerate the development of critical technologies needed for sustainable lunar operations.
Why I'm keeping my Roth IRA position intact
Despite the nearly 500% gain this year, I view Intuitive Machines as an ideal long-term holding for my retirement account. The company isn't just another space stock -- it's building essential infrastructure that every future lunar mission will need.
The company's $1.21 billion market cap feels modest considering it's the dominant commercial lunar payload provider and now has a potential $4.82 billion NASA contract. As the space economy grows from $630 billion today toward McKinsey's projected $1.8 trillion by 2035, lunar infrastructure will become increasingly critical.
The company's record backlog of $316.2 million demonstrates growing demand for its services. This figure doesn't yet include the full $150 million of initial task orders for the Near Space Network data services, suggesting significant potential for backlog expansion.
My Roth IRA is designed for exactly these types of asymmetric opportunities -- companies with massive addressable markets and clear competitive advantages. The combination of proven execution, a growing backlog, and transformative partnerships creates a compelling investment case.
Intuitive Machines represents more than just a space company; it's positioning itself as the backbone of lunar infrastructure. Its three-pillar strategy of delivery, data transmission, and autonomous operations creates multiple revenue streams and competitive advantages that could compound for decades.
While maintaining a full position after such gains isn't for everyone, Intuitive Machines' unique position in the lunar economy aligns perfectly with my retirement account's decades-long investment horizon. Sometimes, the hardest part of investing is letting your winners run, especially when they're just beginning to fulfill their potential.
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George Budwell has positions in Intuitive Machines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
