Could Intuitive Machines Become the Next AST SpaceMobile?

AST SpaceMobile (NASDAQ: ASTS) is one of the market's hottest space-related stocks. It soared 445% this year as the bulls cheered its progress toward launching its first low-Earth orbit (LEO) satellites for lower-band cellular connections.

AST hasn't generated any meaningful revenue yet, but it's expected to finally start making money once it launches its first five Block 1 BlueBird (BB) satellites next month. It's already signed cellular broadband agreements with AT&T and Verizon this past May, and analysts expect it to generate $4.3 million in revenue this year. By 2026, they expect that figure to soar to $692 million as it expands its network.

Image source: Getty Images.

That's a bright outlook, but a lot of that growth is already priced into AST's shares. With an enterprise value of $5.1 billion, it already trades at seven times its 2026 sales -- and that's assuming it successfully launches all of its satellites without any delays or failures. So, instead of going all-in on AST, investors might consider spreading out their bets on some smaller space stocks that haven't blasted off yet.

One of those speculative stocks might be Intuitive Machines (NASDAQ: LUNR) . Let's see if this little space exploration company has a shot at replicating AST SpaceMobile's massive gains.

What does Intuitive Machines do?

Intuitive Machines develops lunar landing and exploration vehicles. The Houston-based company was founded in 2013, signed three major contracts with NASA, and went public by merging with a special purpose acquisition company ( SPAC ) in 2023. But like many SPAC-backed companies, Intuitive Machines overpromised and underdelivered.

Let's look at the massive gap between its pre-merger estimates and its actual sales over the past three years:

Data source: Intuitive Machines.

The company still generated a steady stream of revenue from its existing NASA contracts, but it only secured a single new NASA support contract through a joint venture with KBR in 2023. That lack of new contracts caused it to miss its pre-merger expectations by a mile.

The launch of Intuitive's first Nova-C lunar lander, which was originally scheduled for 2021, was also delayed for nearly three years before it finally landed on the Moon in February. Nevertheless, that still marked the first successful U.S. Moon landing since 1972 and drove NASA to award the company with a new lunar terrain vehicle (LTV) contract in April.

Can Intuitive Machines scale up its business?

Intuitive Machines ended the second quarter of 2024 with a contracted backlog of $213 million. It generated $115 million in revenue in the first half of 2024, and it expects that figure to reach $210 to $240 million for the full year.

However, the company also racked up a net loss of $105 million in the first half of the year, and analysts expect it to incur a net loss of $68 million for the full year. That seems like a grim situation for a company that only held $32 million in cash and equivalents at the end of the second quarter, but it insists it has enough cash to fund its operations over the next 12 months. It had also paid off all of its outstanding debt by the end of July.

Looking ahead, it plans to bid for new NASA contracts and generate commercial "ridesharing" revenue by delivering other payloads to the moon. Analysts expect it to generate $475 million in revenue by 2026 as it scales up its business. They also expect it to turn profitable by the final year. Based on its enterprise value of $330 million, Intuitive Machines trades at just 1.5 times this year's sales and less than one times its estimated sales of 2026. That makes it a lot cheaper than AST SpaceMobile.

Could it become the next AST SpaceMobile?

Intuitive Machines might seem like a less speculative investment than AST SpaceMobile, but it's also growing at a slower rate and locked into rigid government contracts. AST relies on commercial customers like AT&T and Verizon, and it could grow a lot faster if it attracts the attention of other major telecom companies.

Therefore, this could ultimately be an apples-to-oranges comparison.

Intuitive Machines could flourish over the next few years as a major NASA contractor, but it might not generate as much excitement as AST, which aims to significantly expand the coverage of wireless providers with its LEO satellites. So, while Intuitive Machines might not quite be the "next AST SpaceMobile," it looks undervalued relative to its growth potential and could be a great long-term buy.

Leo Sun has positions in AT&T. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy .