Space equities can have dramatic rises, but investors eventually need more than a compelling mission and a solid story.
Intuitive Machines (LUNR) may be starting to deliver.
Stifel upgraded the space-infrastructure company to Buy from Hold after Intuitive Machines reported a remarkable acceleration in new orders with a backlog that rose to $1.76 billion from $1.06 billion.
The analyst firm decreased its price target to $26 from $32, albeit the lower goal still suggested about 48% upside to the $17.56 share price indicated when the call was released.
That seeming paradox is what makes the upgrade so interesting.
Stifel isn’t saying Intuitive Machines has suddenly become a low-risk investment. The company is still not profitable; second-quarter results were a disappointment, and margins are thin as the business scales.
Instead, the analyst firm thinks the recent downturn in the stock has shifted the risk-reward profile at the same time that the company’s order book is getting much stronger.
The backlog increased by $707 million in just one quarter, and the book-to-bill ratio was 4.5 times. Revenue surged 310 percent year over year to roughly $206 million.
Those data suggest Intuitive Machines is evolving into something bigger than the moon-landing stock many investors first discovered.
Intuitive Machines’ $1.76 billion backlog changes the debate
For younger aerospace companies, backlog is one of the most useful figures investors have.
Revenue shows shareholders what the business accomplished in the quarter. Backlog provides visibility into awarded work that could convert into future revenue.
Intuitive Machines’ backlog rose to $1.76 billion from $1.06 billion, up about 66%.
The company had a book-to-bill ratio of 4.5x, implying that it booked new business at more than four times the rate of revenue recognized in the period.
That is no guaranty of future profits. Contracts might be delayed, amended, or pricier to perform than intended.
But it does give some visibility.
The article said the largest addition was a commercial geostationary-orbit satellite contract worth more than $600 million. This award is especially meaningful because it extends the Intuitive Machines tale beyond the moon.
Spacecraft manufacture, lunar landers, NASA engineering, and lunar communications development brought in revenue for the corporation in the second quarter. Adding a big GEO satellite program makes the income base seem more diversified across civil, commercial, and national-security space industries.
That could represent a much larger addressable market than just moon missions.
Related: Bank of America reveals Rocket Lab stock outlook after earnings
That growth is important because the market has typically viewed Intuitive Machines as a very speculative investment on lunar exploration. The new order book gives investors another reference point: a rising aerospace contractor with billions of dollars of work on the books.
It seems Stifel is making that very distinction.
The firm upped its revenue predictions but cut its stock-price goal, indicating its assessment of the operating business has improved even as it applies a more conservative valuation.
That is a remarkable combination.
Intuitive Machines still has to turn growth into profit
There’s a reason the stock stays speculative.
Adjusted EBITDA was a loss of $13.8 million in the second quarter. Earnings per share were a loss of 29 cents, compared with Wall Street projections of a loss of roughly 9 cents.
Management said adjusted EBITDA would have been positive but for an earned-at-completion adjustment related to its IM-4 lunar lander.
But investors can’t just disregard the loss.
The company’s trailing gross margin of about 16% is a reminder of how tricky the economics of scaling a space-hardware firm can be.
Building spacecraft, conducting lunar missions, and fulfilling government contracts take funds, technical competence, and patience. A fast-growing backlog only provides value to shareholders if management can deliver those contracts at acceptable margins.
That’s why Intuitive Machines’ 2026 outlook matters.
Management confirmed $900 million to $1 billion in yearly revenue and continues to forecast positive adjusted EBITDA.
Stifel’s upgrade will look increasingly reasonable if the company accomplishes those aims and starts converting its $1.76 billion backlog.
If margins stay weak, investors may find that an excellent backlog doesn’t necessarily mean impressive earnings.
More SpaceX:
- Morgan Stanley says SpaceX investors miss the bigger story
- Peter Schiff says SpaceX is a warning for hyped stocks
- SpaceX stock defies latest Wall Street forecasts
The $600 million-plus GEO satellite award may therefore become one of the most important programs to watch.
It shows Intuitive Machines can be competitive for work outside the Moon, but how effectively they do it will determine if that diversification helps profitability as well as revenue.
Andriy Onufriyenko / Getty Images
Stifel sees opportunity after Intuitive Machines’ selloff
What’s interesting about Stifel’s call is that the analyst became more bullish despite lowering the target price.
Typically, a price-target lowering is a negative for investors.
Here, the math is different.
Stifel’s updated $26 target at the stock’s stated $17.56 price still represented about 48% potential upside.
The firm seems to think the stock dropped more quickly than its outlook for Intuitive Machines’ core opportunity did.
The company meanwhile had a better order book.
That is the sort of setup that analysts are generally looking for: a poorer mood and stronger operating indicators.
Intuitive Machines numbers investors should know
- $1.76 billion: Current backlog, up from $1.06 billion.
- $707 million: Increase in backlog during the period.
- About 66%: Backlog growth from the previous level.
- $600 million+: Value of the large commercial GEO satellite award.
- $206 million: Second-quarter revenue.
- 310%: Year-over-year revenue growth.
- 4.5x: Reported book-to-bill ratio.
- $900 million to $1 billion: Fiscal 2026 revenue guidance.
- $26: Stifel’s new price target.
- About 48%: Implied upside from the cited $17.56 share price.
Investors should nonetheless resist the temptation of turning an analyst target into a commitment.
Intuitive Machines operates in a business where engineering issues, launch timetables, or government-budget decisions commonly cause delays. The corporation must also prove that its growing revenue base can produce sustainable free cash flow.
But the upgrade from Stifel points to a major change in the investment case.
Intuitive Machines no longer has to sell clients on the idea that it will provide them meaningful work. Its $1.76 billion backlog answers that question.
Now it has to show it can deliver.
This makes the next chapter much more interesting.
The stock is still hazardous, and the price goal is lower than before.
But after the selloff, one Wall Street firm sees an opportunity in the mix of increasing orders, fast-growing revenue, and a bigger space-infrastructure sector.
Moon missions may have piqued investors’ interest in Intuitive Machines.
Maybe it’s the $1.76 billion order book that keeps it there.
Related: Nvidia just took a very serious step on SpaceX stock
