July 20, 2022, marked the 53rd year since astronauts Neil Armstrong and Edwin “Buzz” Aldrin became the first men to walk on the moon in 1969. Meanwhile, the space industry has grown in leaps and bounds since those early days, and in 2021 a global record of space launch attempts took place, with a total of 145 launches.
Venture capital (VC) funds invested a record amount of $17 billion into 328 space companies in 2021, beating the record of $9.1 billion in the previous year. Most of the buzz around space travel and exploration has been generated in the U.S., which is a leader in space investments making out 62% of global investments in this market niche.
Despite companies like Elon Musk’s Space X and Jeff Bezos’ Blue Origin remaining private, there are plentiful other publicly traded companies in the space industry worth keeping an eye on.
Thereupon, Finbold has identified two space companies to watch in the second half of 2022.
Iridium Communications Inc. (NASDAQ: IRDM)
In essence, Iridium is a company that owns its own constellation of satellites encircling the globe, providing voice and data services all over the planet. So far, the growth of the business was consistent, providing predictability and stability in a tough market, despite also seeing some volatility in the share price.
In its latest earnings release, the company showed revenues of $168.22 million, an increase of 14.8% year-on-year (YoY), beating estimates by $11.39 million. Similarly, earnings per share (EPS) were $0.02, beating estimates by $0.02 and reiterating their full-year guidance of 5% to 7% revenue growth. Further, nabbing a $324 million ground control and operations contract by the Space Development Agency on May 24, will possibly go a long way towards providing more value to their shareholders.
Over the last few trading sessions, IRDM is comfortably sitting above all daily Simple Moving Averages (SMAs), with trading volumes staying fairly consistent. Year-to-date (YTD), the stock is down ‘only’ 5%, while some recovery has been noted in the last five days as the stock gained over 4%.
A support zone for the stock is between $38.02 and $38.93, while the resistance line is located at $39.95.
Moreover, one TipRanks analyst covers the stock with a moderate buy rating, seeing the stock trade at $48 in the next 12 months, a potential 22.95% upside from the current trading price of $39.04.
Sirius XM (NASDAQ: SIRI)
Sirius is the lone rockstar of satellite radio, launching new satellites in space through their partners and offering value to their shareholders. Meanwhile, the satellite radio services are provided for a monthly fee, and the company has 34 million subscribers, with Pandora, an audio streaming business boasting 60 million active users.
In its Q1 earnings release, the company highlighted revenue of $2.19 billion, a 6.3% YoY increase, beating estimates by $40 million, while EPS was in line at $0.08. Furthermore, the company reiterated its full-year guidance of total revenue of $9 billion.
YTD, the shares are up over 2%, with price consolidation seen in recent trading sessions. In the last month, SIRI has been trading in the $5.86 to $6.54 range, with the support zone ranging from $6.17 to $6.32. On the other hand, the resistance zone is in the $6.74 to $6.61 range.
Additionally, analysts rate the shares a moderate buy, predicting that in the next 12 months, the stock could trade at $7.71, 18.43% higher than the current trading price of $6.51.
On the whole, the war in Ukraine highlighted, among other things, the importance of satellite imagery and satellites in general as a tool for attack or defense in war times.
Moreover, technological advances have transformed the space sector and enabled investors to take part in space exploration, a domain once dominated by governments.
Investors looking to partake in the space sector, should keep the two above companies on their watchlists.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.