The space ecosystem is expanding rapidly, with significant research and development, increased focus on advanced manufacturing technologies, and deployment of innovative digital threads to drive efficiencies and evolve business models.
However, the space sector is currently struggling with the macro headwinds from the Russia-Ukraine war, sky-high inflation, and the rising cost of borrowing. Moreover, analysts worry that a decrease in capital available to invest in start-ups could dampen the industry’s overall growth.
“There’s going to be a little bit of a lull, if you will, over the next year or two, and then things should start picking back up again,” Lars Hoffman, senior vice president of global launch services at Rocket Lab said. Moreover, diminishing investors’ interest in space companies is evident from ARK Space Exploration & Innovation ETF’s (ARKX) 19.3% slump this year.
Given this backdrop, beaten-down space stocks Astra Space, Inc. (ASTR) and Virgin Galactic Holdings, Inc. (SPCE) could be best avoided, given their bleak fundamentals.
Astra Space, Inc. (ASTR)
ASTR designs, tests, manufactures, launches, and operates space products and services. Its customers primarily include satellite operators, satellite manufacturers, government agencies, and prime defense contractors.
For the fiscal quarter ended June 30, 2022, ASTR’s operating loss increased 176.3% year-over-year to $82.61 million. Net loss for the period increased 163% from the prior-year quarter to $82.30 million. Loss per share came in at $0.31 in the same period.
For the fiscal quarter ending September 2022, the consensus EPS estimate stood at a negative $0.20.
The stock has declined 87% over the past year and 62.2% over the past six months to close the last trading session at $1.20.
ASTR’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ASTR has a Stability and Sentiment grade of F and a Growth, Value, and Quality grade of D. In the 31-stock Airlines industry, it is ranked #30. Click here to see the additional POWR Ratings for ASTR for Momentum.
Virgin Galactic Holdings, Inc. (SPCE)
SPCE develops, manufactures, and operates spaceships and related technologies for conducting commercial human spaceflight and flying commercial research and development payloads into space.
SPCE’s revenue decreased 37.5% year-over-year to $357 thousand in the fiscal quarter ended June 30. Operating loss increased 48.5% from the prior-year period to $109.72 million. The company’s net loss came in at $110.72 million, up 17.7% from the prior-year period, while its net loss per share was $0.43.
For the fiscal quarter ending September 2022, Street revenue estimate of $94.62 thousand reflects a 96.3% year-over-year decrease. Also, the consensus revenue estimate of $1.29 million indicates a 60.8% decrease year-over-year in the ongoing fiscal year.
The stock has slumped 73.9% over the past year and 63.4% over the past nine months to close the last trading session at $6.12.
It’s no surprise that SPCE has an overall F rating, which translates to Strong Sell in our POWR Rating system. SPCE also has an F grade in Growth, Stability, and Sentiment and a D for Value and Quality. It is ranked last in the same industry.
To see the additional POWR Ratings for Momentum for SPCE, click here.
ASTR shares were trading at $1.20 per share on Monday afternoon, down $0.05 (-3.63%). Year-to-date, ASTR has declined -82.68%, versus a -12.37% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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