Momentus Inc. (MNTS) in Santa Clara, Calif., is a commercial space corporation that intends to provide in-space infrastructure services that include in-space transportation, hosted payloads, and in-orbit services.

The company’s shares have surged 97% in price over the past month, due primarily to its announcement related to multiple launch agreements with Space Exploration Technologies Corp. (SpaceX).

However, the stock has been down 67% in price over the past year and 64.5% over the six months to close yesterday's trading session at $3.94. In addition, it is currently trading 73.2% below its 52-week high of $14.69, which it hit on July 02, 2021.

Here is what could shape MNTS' performance in the near term:

Investigation

Last December, Johnson Fistel, LLP commenced investigating potential claims on behalf of Stable Road Acquisition Corp.--which is currently trading as MNTS–against some of MNTS’ officers and directors. Throughout the Class Period, the defendants allegedly misled and omitted to disclose unfavorable facts concerning MNTS' company operations, prospects, and Stable Road's due diligence activities in connection with the merger, which was known to the defendants or carelessly ignored by them, according to the claim.

Inadequate Financials

MNTS' operating loss increased 83.7% year-over-year to $24.68 million for the fourth quarter, ended Dec. 31, 2021. The company reported a $2.73 million net loss, while its loss per share amounted to $0.05 over this period. In addition, its net cash used in operating activities grew 166.5% from its  year-ago value to $86.71 million for the year ended Dec. 31, 2021.

POWR Ratings Reflect Uncertainty

MNTS has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. MNTS has a D for Quality. The company's poor financials are in sync with the Quality grade.

Among the 75 stocks in the C-rated Air/Defense Services industry, MNTS is ranked #67.

Beyond what I have stated above, one can view MNTS ratings for Value, Stability, Momentum, Growth, and Sentiment here.

Bottom Line

Shares of MNTS have slumped more than 60% in price over the past year due to investor concerns over the company’s weak financials and controversy related to its SPAC deal with Stable Road Acquisition Corp. Furthermore, its lack of revenue could further raise investors' concerns over its near-term prospects. Therefore, we believe the stock is best avoided now.

How Does Momentus Inc. (MNTS) Stack Up Against its Peers?

While MNTS has an overall D rating, one might want to consider its industry peers, Moog Inc. (MOG.A) and Ducommun Incorporated (DCO), which have an overall A (Strong Buy) rating.

MNTS shares fell $0.04 (-1.02%) in premarket trading Tuesday. Year-to-date, MNTS has declined -5.74%, versus a -6.09% rise in the benchmark S&P 500 index during the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

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