Space stocks have lost significant ground over the past couple of months as investors have reduced their exposure to sectors with limited near-term prospects due to the looming interest rate hikes and market uncertainties. Several space companies that went public last year through SPAC deals have suffered heavy losses in the highly volatile market.
According to reports, the two-decade-long partnership between space agencies of the United States and Russia through the International Space Station is currently in jeopardy because of the sanctions on Russia in response to the country’s invasion of Ukraine. This has also contributed to investors’ negative sentiment concerning space stocks.
Therefore, we believe investors are better off avoiding space stocks Virgin Galactic Holdings, Inc. (SPCE), AST SpaceMobile, Inc. (ASTS), Astra Space, Inc. (ASTR), and Redwire Corporation (RDW), which have slumped in price over the past few months and could continue suffering a downtrend due to their poor growth prospects.
Virgin Galactic Holdings, Inc. (SPCE)
SPCE in Las Cruces, N.Mex., develops, manufactures, and operates spaceships and related technologies for conducting commercial human spaceflight and flying commercial research and development payloads into space. It is also involved in the ground and flight testing and post-flight maintenance of its spaceflight system vehicles.
For the fourth quarter, ended Dec 31, 2021, SPCE reported an $81.28 operating loss, representing an increase of 9.3% year-over-year. Its loss per share amounted to $0.31, while its cash and cash equivalents declined 21.3% year-over-year to $524.48 billion for its fiscal 2021. In addition, the company’s net cash flow used in operating activities amounted to $65.13 billion for the fourth quarter.
Analysts expect its EPS to remain negative in its fiscal year 2022. The $1.44 million revenue estimate o represents a 44.2% decline in the fourth quarter, ending September 30, 2022. The stock has declined 41.4% in price year-to-date and 45.4% over the past three months.
SPCE’s POWR ratings are consistent with this bleak outlook. The stock has an overall F rating, which translates to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
SPCE has rated an F grade for Value and Stability and a D for Quality. Within the F-rated Airlines industry, it is ranked #30 of 31 stocks.
To see additional POWR Ratings for Growth, Sentiment, and Momentum for SPCE, click here.
AST SpaceMobile, Inc. (ASTS)
ASTS in Midland, Tex., operates a space-based cellular broadband network for mobile phones. Its SpaceMobile service offers mobile broadband services for users traveling in areas without terrestrial mobile services on land, at sea, or in flight.
ASTS’ gross profit declined 72.4% year-over-year to $0.35 million in the third quarter, ended Sept.30, 2021. Its operating expenses increased 257.9% from its year-ago value to $23.11 million. The company’s net cash flow used in operating activities grew 348.8% year-over-year to $58.61 million. The stock has dipped 44.7% over the past six months and 45.3% over the past year.
ASTS’ poor prospects are also apparent in its POWR Ratings. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system.
It also has an F grade for Value, Quality, and Stability. ASTS is ranked last among 19 stocks in the F-rated Telecom – Domestic industry.
Click here to see the additional POWR Ratings for ASTS (Growth, Momentum, and Sentiment).
Astra Space, Inc. (ASTR)
ASTR functions is a space launch company and provides satellite launch services. The Alameda, Calif., company develops, tests, manufactures, and manages space services for global communications, earth observation, weather monitoring, navigation, and surveillance.
In December, The Schall Law Firm, a national shareholder rights litigation firm, announced that it was investigating claims on behalf of investors of ASTR. The investigation is focusing on whether the company has issued false or misleading statements and failed to disclose relevant information to investors. According to a research report published by Kerrisdale, which alleges that: “Astra’s rocket launch projections are nonsense. No market analysis supports Astra’s planned 300+ launches by 2025.” This could negatively impact ASTR’s price performance in the near term.
ASTR’s operating loss increased 446.8% from its year-ago value to $42.54 million for the third quarter, ending Sept.30, 2021, while its net loss increased 212.3% year-over-year to $16.25 million. The company’s loss per share amounted to $0.06.
The stock price has declined 53.7% year to date and 68.7% over the past six months.
ASTR’s weak fundamentals are reflected in its POWR ratings. The stock has an overall F rating, which equates to a Strong Sell in our POWR Ratings system. The stock also has an F grade for Sentiment and a D for Growth and Stability. In the Airlines industry, it is ranked last of 31 stocks.
In addition to the POWR Ratings grades I have just highlighted, you can see the ASTR ratings for Momentum, Value, and Quality here.
Redwire Corporation (RDW)
RDW in Jacksonville, Fla., is a space infrastructure company that develops, manufactures, and sells mission-critical space solutions and components for national security, civil, and commercial markets internationally. It offers space commercialization, digitally engineered spacecraft, space domain awareness and resiliency technology solutions; advanced sensors and components; and on-orbit servicing, assembly, and manufacturing solutions.
In January, The Schall Law Firm, a national shareholder rights litigation firm, reminded investors of a class-action lawsuit against RDW. The company is under investigation for allegedly making false and misleading statements to the market. According to the complaint, accounting issues allegedly plagued RDW’s subdivisions, failing to establish adequate internal controls over financial reporting. The company’s public statements were false and materially misleading throughout the class period based on these facts it alleges.
During the second quarter, ending June 30, 2021, RDW’s operating loss amounted to $0.70 million, while its net loss amounted to $5.75 million. Its loss per share was $1.40. And its cash used in operating activities amounted to $0.79 million.
RDW’s EPS is expected to remain negative in its fiscal year 2022. The stock has declined 53.7% in price over the past six months.
RDW’s POWR ratings are consistent with this bleak outlook. The stock has an overall D rating, which equates to a Sell in our proprietary rating system.
RDW also has a D grade for Stability, Growth, and Value. The stock is ranked #68 of 73 stocks in the C-rated Air/Defense Services industry.
Beyond the POWR Ratings grades I have just highlighted, you can see the RDW’s Sentiment, Momentum, and Quality ratings.
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SPCE shares were trading at $7.58 per share on Monday afternoon, down $0.26 (-3.32%). Year-to-date, SPCE has declined -43.35%, versus a -11.21% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing. More...
More Resources for the Stocks in this Article
| Ticker | POWR Rating | Industry Rank | Rank in Industry |
| SPCE | Get Rating | Get Rating | Get Rating |
| ASTS | Get Rating | Get Rating | Get Rating |
| ASTR | Get Rating | Get Rating | Get Rating |
| RDW | Get Rating | Get Rating | Get Rating |
