By October 9, 2024, it appears that there is a new and often overlooked industry poised to generate trillion-dollar companies: space object tracking.
The matter has been growing in relevance in recent years as the North American continent has been dealing with a string of unidentified flying objects (UFOs), with the most publicized event being a cylindrical flier shot down over Canada’s Yukon in early 2023.
The recent publication of the images of the object – likely a Chinese spy or weather balloon – has reignited the discussion surrounding such UFOs and brought to surface one firm that has been proactive in tracking such ‘targets.’
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Indeed, BlackSky Technology (NYSE: BKSY) won a seven-figure contract in October 2024, specifically to help track space objects and their operational environment.
Why BlackSky stock is likely to benefit from the military
BlackSky, otherwise primarily involved with geospatial intelligence, is also positioning itself as the leading company for tracking moving objects in space.
These activities are likely to only grow in importance in the coming years.
To begin with, there are clear national security use cases – not only is there an untold number of spy satellites in Earth’s orbit, but there has been a persistent rumor that the long-standing agreements against weaponizing space are on increasingly shaky ground.
The primary concerns in this regard are the dangers of placing nuclear weapons or the equally destructive mass drivers outside of the planet’s atmosphere, and detecting construction efforts early would be invaluable both nationally and internationally.
Why BlackSky stock is likely to benefit from civilian matters
However, the potential impact of BlackSky and other similar companies would extend far beyond military matters.
Scientists have been worried for a long time about the dangers of the Kessler Syndrome.
In a nutshell, though loosely defined, the Kessler Syndrome represents a scenario in which humanity has sent so much junk into orbit – and that junk has collided just enough times to create trillions of tiny hypersonic projectiles – that the current satellite web gets destroyed.
Thus, humanity would become trapped on Earth for an indeterminate amount of time by space rubbish.
Firms like BlackSky, with their capabilities of tracking moving objects outside of Earth’s atmosphere, could prove invaluable for orbital cleaning efforts.
Such a drive may soon become a reality as a world in which the transatlantic cable is the pinnacle of human communications is, arguably, an unpleasant thought.
Furthermore, tracking the movements of the ever-growing number of satellites may soon prove a critical industry, particularly as some of them are now raising unexpected concerns.
For example, the newest batch of Starlink satellites is allegedly leaking 30 times more radiation than their predecessors, and some scientists are worried that, should the trend continue, astronomy could become nearly impossible.
Wall Street experts grow increasingly bullish about BKSY shares
Along with the company’s future potential, BlackSky stock already has numerous fans among Wall Street experts.
This is reflected in the fact that BKSY shares boast an overall ‘strong buy’ rating on the stock analysis platform TradingView, and all six experts rated them as such.
Price targets are equally impressive given that BlackSky shares are, on average, expected to rise 200.10% from their press time price of $5.85 and to stand at $17.29 in 12 months.
The most optimistic forecast is even more impressive as it predicts a $455.56 rally to $32 per share, and even the most pessimistic ratings have their sights set at $10 – 73.61% above BKSY stock’s latest closing price.
Additionally, analyst forecast revisions assigned since the start of October are highly bullish despite having their price targets at the low end of the spectrum.
Analysts revise BlackSky stock 12-month price target
On October 2, Oppenheimer initiated coverage of BlackSky stock with a ‘buy’ rating and a $10 12-month prediction.
The firm simultaneously revealed it had invested $300 million in BlackSky. It highlighted its advanced network of geospatial satellites and ability to provide nearly real-time, high-resolution images of Earth as a major business strength.
Two days later, on October 4, Craig-Hallum analysts upgraded BKSY stock from ‘hold’ to ‘buy,’ citing the firm’s recent raising of $46 million and the flexibility the cash will provide.
Additionally, the company’s experts explained that they believe BlackSky will achieve a positive cash flow by 2026 and highlighted the geospatial intelligence firm’s attractive risk/reward ratio.
Why a BKSY stock investment could be the play of the century
A long-standing fact of the stock market has been that finding future sectors, technologies, and industries while they are in their infancy is a sure way to retire early, even on a relatively small initial investment.
For example, investing $1,000 in Apple (NASDAQ: AAPL) in 2007 – the year the company decisively turned to consumer electronics with the release of the first iPhone – would have generated more than $55,000 in profits.
Investing the same amount in Nvidia (NASDAQ: NVDA) exactly two years ago – just as the artificial intelligence (AI) boom was starting – would have yielded an impressive $10,000.
Considering the number of future issues likely to require highly precise tracking of moving objects in space, BlackSky could become the next Apple or Nvidia and, in turn, generate similar returns.
Why BlackSky stock remains a high-risk play
Despite the company’s – and the industry’s – immense potential, positive expert outlook, March Department of Defense contract to help in a ‘moving target study,’ and October’s seven-figure contract, BlackSky remains an uncertain investment.
On October 8, 2024, BKSY shares are 92.94% below their initial public offering (IPO) price. Even with the major tailwinds it has received through the year, they remain 47.06% in the red in the year-to-date (YTD) chart with a price of just $5.85.
Additionally, as highlighted by Craig-Hallos’ analysis and forecast for 2026, the company has a history of less than impressive profitability.
Finally, even should the most bullish expectations prove correct – and even if the industry as a whole becomes as big as AI or the smartphone – there are no guarantees Blacky will be the one to benefit.
Numerous companies operating in booming industries have completely disappeared despite boasting strong momentum at the time.
The danger is particularly pointed when it comes to space operations.
Despite the current trends of increasingly relying on private entities like SpaceX for exploration and ensuring astronauts aren’t ferried to the International Space Station (ISS) together with the cosmonauts, many argue extraterrestrial activities should be an entirely public endeavor.
Featured image credit: Department of National Defence via CTV.
