If I Could Only Buy 1 Space Stock After the Rocket Lab Crash, It Would Be This One

Rocket Lab fell more than 20% in the week ending Oct. 16 after delaying Neutron's first launch to 2027 and facing a request for an FCC probe of its planned Iridium takeover; it still trades at nearly 34 times this year's sales. The article favors Intuitive Machines, citing analysts' forecasts of 84% annual revenue growth from 2025 to 2028, positive adjusted EBITDA in 2026, and a valuation of about 2 times this year's sales on a $1.9 billion market cap. Nearly 28% of Intuitive's float was short at September's end, creating potential for a short squeeze, though both stocks are described as speculative and vulnerable to elevated interest rates and Treasury yields.

Analysis

The valuation gap is not a clean “cheaper space stock” signal: sales multiples may be distorted by Lanteris consolidation and milestone-driven contract revenue, while Intuitive Machines’ forecast EBITDA inflection depends on successful delivery and acceptance—not just a growing backlog. NASA concentration makes LUNR sensitive to procurement timing, mission outcomes, and budget reprioritization; a slipped launch can defer revenue and raise working-capital needs even if the program remains intact. Verify backlog quality, customer concentration, cash burn, and acquired-business contribution before underwriting the growth estimates.

Over days to weeks, high short interest can amplify a genuine contract or mission catalyst, but it is not itself a catalyst and may be stale. Over 1–3 months, watch NASA award timing, integration disclosures, and any evidence that the planned 2027 missions remain on schedule. Over 6–18 months, execution and repeatable economics matter more than headline revenue growth. Rocket Lab’s Neutron delay weakens its near-term launch diversification case, but it does not establish that LUNR has a broader moat; the businesses have different risk drivers. The proposed Iridium transaction’s FCC review adds deal-timing uncertainty for Rocket Lab, while Ligado’s allegation is not a regulatory finding. Elevated yields remain a multiple headwind across both speculative names. Contrarian point: the apparent LUNR discount may be compensation for binary execution and customer-concentration risks, not mispricing. Thesis weakens on further mission slips, deteriorating cash conversion, or guidance/backlog reductions; RKLB’s relative disadvantage narrows if Neutron milestones recover.

Key Decisions for Investors

• Avoid buying LUNR solely on its lower sales multiple or short interest. First confirm cash runway, contract backlog conversion, acquired-revenue contribution, and launch schedule in filings and upcoming results.
• If those checks are satisfactory, consider a small, staged LUNR long as a high-volatility catalyst position; add only on verified NASA awards or on-time mission milestones. Size for a material loss if execution slips, and reassess on any guidance or backlog cut.
• For relative value, consider a modest long LUNR / short RKLB pair only as a tactical expression of near-term execution risk—not as a business-model hedge. Keep exposure limited and exit if LUNR’s mission/backlog metrics deteriorate or RKLB demonstrates renewed Neutron schedule credibility.
• Track the FCC process on Rocket Lab’s planned Iridium transaction separately from the launch thesis. Treat adverse process developments as deal-timing risk, not proof that the acquisition will be blocked; reassess on formal FCC action or a change in transaction terms.