2 “Strong Buy” space stocks that are ready for takeoff
Space, the last frontier. Throughout history, the expansion beyond Earth has fascinated people around the world, as Apollo 11 has been leading space exploration ever since it first landed on the Moon. Now, outer space has sparked Wall Street interest. Given the high level of private funding and advances in technology, professionals argue that there may be major implications that access to space should be more accessible and less expensive. For this, new markets such as satellite broadband, high speed product delivery, reusable rockets and manned space travel are emerging. By 2030, the global space industry could reach $ 600 billion, according to a potential opportunity, according to a recent report by KPMG. , With it currently valued at $ 350 billion. With this in mind, we used TipRank’s database to zero in on two space shares reaching for the stars, hence Street. Both tickers received a “Strong Buy” consensus rating, claiming the full support of the analyst community. Virgin Galactic Holdings (SPCE) seeks to commercialize Virgin Galactic space travel and revolutionize commercial flight, by offering high-speed point-to-point travel. Given the significant backlog of commercial spaceflight demand, many members of the Street have high expectations for this space stock. Covaring Oliver Chen, according to SPCE, “sees SPCE to benefit from consumer interest, especially for high-experience luxury experiences. Pure-qualified individuals.” He said, “We believe the commercial space There is a substantial growth opportunity with the Yan business, which already has ~ 600 reservations, and the development of a high-speed point-to-point journey. “Looking at the market opportunity, Chen estimates that this is part of the business. SPCE could increase its top-line to $ 1 billion-plus by 2030, growing at a 60%-improvement CAGR (2021-2030), with an EBITDA margin of 46%. According to the analyst, globally 2.4 Total Addressable Market (TAM) is for Total SpaceLight (submittal) with total assets of million people, with assets of more than $ 5 million globally. In addition, SPCE has developed its technology to develop additional revenue streams. Can use. High speed P2P as commercial air travel. The development of hypersonic aircraft will make 85% of global network pairs accessible in a day trip. In addition, analysts think that the high-speed P2P opportunity could achieve a TAM of $ 985 billion by 2050, and SPCE’s market share could grow at a rate of 20%. “P2P is in a very early shift, but we believe the company has the resources, capital and experience to pursue this business line,” Chen noted, adding that the company’s leadership team from NASA and Disney Brings expertise to the table, argues Chen SPCE. Able to capitalize on the opportunity, potentially solidifying its position as an experiential luxury brand with solid execution. The status of its commercial space flight offering as a luxury airline experience, which is of more use to consumers, is likely to be given to SPCE for the first time. Good benefits for others like Blue Origin. “Given the high fixed costs of space tourism operations, the first-big advantage looks critical to success; And VG appears in a better position than BO to achieve this, ”Chen noted. Can SPCE give first-mover benefits? For over 10 years of SPCE the chain evolved with an investment of $ 1 billion, which remains to this day and vertically integrated aerospace development capacity. What’s more, SPCE has “created a competitive gap in the high-barrier-to-entry industry and benefited from strong consumer demand, which should support a premium pricing structure.” Based on all of the above, the chain inserts an outperform (ie buy). $ 22 target on rating and stock. (To see the chain track record, click here) Are there other analysts in the agreement? They are Buy-only ratings, 7 to be exact, have been released in the last three months. Therefore, the message is clear: SPCE is a strong buy. With a $ 25.43 average price target, shares could rise 22% over the next year. (See Virgin Galactic Stock Analysis at TipRank) Aerojet Rocketdyne Holdings (AJRD) serves customers, including the US Department of Defense (DoD), NASA, and other agencies and companies, developed and deployed Aerojet Rocketdade Advanced Propulsion and Energetics systems. It cooks. Given its recent contract awards, many analysts believe that the company has long-term growth prospects. Ken Herbert, star-star analyst at Canaccord Genuity, recently met with the new CFO of AJRD, which stayed away from the discussion with its fast pace. The company expects the recent SLS RS-25 engine order to result in sales of 40% in the space business, which has been stable due to recent SLS RS-25 engine orders. “Despite near-term margins being limited, we believe that revenue visibility, a strong balance sheet in space and a decrease in both space and incremental opportunities, is not reflected in AJRD’s stock,” said Herbert. An essential piece of the puzzle here. Earlier in September, AJRD announced that it would build two elements of new ground-based strategic deterrent (GBSD) nuclear missiles for Northrop Grumman, $ 13.3 billion to begin initial production of the “Minutman IV” platform, Received 8.5-year EMD contract. . The AJRD is responsible for building a large solid rocket motor for the missile’s upper stage and the post-boost propulsion system required to guide nuclear warheads to their targets through apogi (the highest point of their parabolic flight arc) . Weighing in on the deal, Herbert commented, “The program is expected to be adequate for both Aerojet and Northrop, with 400 active and 242 spare ICBMs expected to occupy existing launch sites in the American West.” It is estimated that the GBSD program will be worth $ 63 billion during its first 20-year lifetime, which is likely to be extended given the longevity of the current Minutman III deterrent. According to the good news, the backlog of AJRD has increased. A record high of $ 6.8 billion as of Q2 2020, a 48% gain from the prior-year quarter. According to Herbert, a key driver of this increase is the $ 1.8 billion NASA contract to build 18 new RS-25 engines, which currently support at least five additional Artemis lunar missions beyond the planned three. The analyst said, “Visibility in Aerojet’s business with NASA appears to increase by 2030. Aeroage has also seen backlog growth on THAAD, hypersonic, standard missile and GMLRS.” If this was not enough, Herbert believes missile defense and classified hypersonic programs could see solid backlog growth in the near term. Also, in August, the US Air Force awarded two contracts for the National Security Space Launch (NSSL) program for ULA (a Boeing and Lockheed Joint Venture) and SpaceX. Implications? “Aircraft Rocketdyne is seen as the winner of the contact result, which ensured that the company would continue to provide material on the majority of US military and intelligence launches. AJRD will see double the content of its upper stage engine under the contract on the new ULA Vulcan rocket, which uses a new Centaur upper stage (Centaur V) powered by two RL10 engines, as will the inherited Atlas V The one on the rocket is the opposite of the RL10, “Herbert explained. All in all, AJRD convinced Herbert to repeat its Buy rating for this. With the call, they maintained a $ 54 price target, giving 34% upside potential. Suggested. (To see Herbert’s track record, click here) All in all, other analysts are on the same page. AJRD’s strong Buy consensus rating breaks down to 3 Buys and No Holds or Sells. Meanwhile, The ability to reverse the average price target of $ 56 is 39%. (See AJRD Stock Analysis at TipRank) To find good ideas for stock trading at attractive valuations, buy TipRank’s Best Stocks, a newly launched tool, Which unites all of TipRank’s equity insights. Disclaimer: The opinions expressed in this article are solely those selective wishes. Of illustrators. Content is to be used for informational purposes only. It is very important to do your own analysis before making any investment.