Top 7 Space Stocks to Watch [2022]

Key highlights:

• Space is a new private industry with its own set of unique risks.
• The space sector has significant profit potential, but not all companies are there yet.
• Overall, the space industry has not had the best year so far, but with great risk comes great reward.

Why are space stocks important to watch?

Over the last two decades, the private sector has taken the reins of the space economy. While larger projects like the James Webb space telescope, International Space Station (ISS), and space exploration remain the purview of governments, the value of the global space economy reached US$469b in 2021. By 2040 Citigroup (NYSE: C) forecasts total annual revenue of the space industry will reach US$1t.

Investors can start trading the space economy today. Buy Australian shares and U.S. stocks straight from the Stake platform to enter this rocketing new sector.

Top space stocks to watch

Data as of 23 September 2022

Here are the most traded space stocks from ASX and Wall St

1. Rocket Lab USA Inc (RKLB)

Exchange: NASDAQ

Market Capitalisation: US$1.9b

Stock price (as of 23/09/22): US$4.12

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 76% / 24%

Rocket Lab USA is consistently one of Stake’s most popular stocks, traded more than Boeing and Lockheed Martin combined due in large part to our New Zealand investors. Founded in 2006, Rocket Lab provides launch services, spacecraft and launch components, and on-orbit management.

Rocket Lab has completed 28 launches, deployed 148 satellites, controls three launch pads and has two-photon satellites in orbit. If that was not impressive enough, its customers include NASA, the United States Space Force, DARPA, the National Reconnaissance Office of the U.S., Canon, and Capella Space. This allowed Rocket Lab to generate US$62m in revenue (77% year-on-year growth) at the cost of US$64m (37% year-on-year), resulting in a net loss after tax of US$117m (113% year-on-year) during 2021.

The RKLB stock price has taken a nose dive during 2022, declining 67% year-to-date. This is not surprising considering how higher interest rates increase the risk-free rate, reducing the premium the market places on unprofitable companies. Still, it’s important to note that Rocket Lab’s 113% increase in net loss after tax was primarily due to a 118% increase in research and development and a 143% increase in selling, general and administrative expenses year-on-year. Extracting these expenses brings net loss after tax to a decline of 3.9% year-on-year.

💡Related: How to buy Rocket Lab shares (RKLB)→

2. Kleos Space S.A (KSS)

Exchange: ASX

Market Capitalisation: $52.55m

Stock price (as of 23/09/22): $0.295

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 75% / 25%

Kleos uses one type of satellite, Low Earth Orbit (LEO) nanosatellites. LEO satellites fly between 160km and 1,000km above the earth, compared to planes that fly around 14km above the earth’s surface. The European Space Agency (ESA) argues that LEO satellites have several advantages, the main one being unlike satellites in geo orbit, the lower orbit allows the satellite to change paths quickly around the earth.

According to NASA, nanosatellites are generally described as weighing less than 10kg, usually around the size of a shoe box. In the case of Kleos, the company uses these nanosatellites as they can be quickly moved, are far cheaper to launch and develop, and can geolocate radio frequency emissions.

Despite being founded in 2017, Kleos only began generating revenue from operations in March 2022 ($167,000). In 2021, the company generated $125,528 in revenue but this was due to government grants and the resale of a portion of space on a rocket Kleos had purchased. It would help if you thought of Kleos as a telecommunications company. Before it can start selling its services, it needs to build up sufficient infrastructure. This infrastructure build-up is what the company has been doing since it was founded in 2017.

Each year since 2020, the company has launched one nanosatellite cluster, with four nanosatellites making up a cluster. The last cluster was launched in April 2022 aboard a SpaceX Falcon 9 rocket and continued the company’s track record in achieving a stable LEO orbit. The end goal is to develop and deploy 20 clusters. Kleos has increased its deployment rate and is planning on launching its fourth cluster on the Transporter-6 SpaceX mission in October 2022. The KSS share price declined 60% year-to-date, mainly due to the increase in the risk-free rate we discussed during our Rocket Lab section.

Find out more about Kleos Space S.A in our Under the Spotlight segment on the company.

3. Virgin Galactic Holdings Inc (SPCE)

Exchange: NYSE

Market Capitalisation: US$1.2b

Stock price (as of 23/09/22): US$4.87

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 68% / 32%

Investors have not been happy during 2022, with Virgin Galactic stock declining 64% year-to-date. This result isn’t surprising because of the unprofitable space stocks we have already covered.

Virgin Galactic’s focus is space tourism and is expected to launch this service during Q2 2023. However, the launch date of the company’s space tourism division has been pushed back multiple times, so this new date is far from certain.

Since Virgin Galactic’s services aren’t yet operational, the company generates revenue largely by selling tickets in advance. During Q2 2022, Virgin Galactic generated US$357,000, a decline of 38% year-on-year. An investment in Virgin Galactic is a bet on the launch of its space tourism division rather than its continued success.

We covered Virgin Galactic Holdings in our 25 February 2022 edition of Under the Spotlight.

Source: Virgin Galactic

4. Electro Optic Systems Holdings Limited (EOS)

Exchange: ASX

Market Capitalisation: $76.06m

Stock price (as of 23/09/22): $0.465

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 64% / 36%

Electro Optic Systems Holdings has three key divisions: space, defence, and communications. Here we will focus on the space division, generating 2.2% of 2021’s $213m in revenue. This may seem like an insignificant source of revenue, but when it comes to space, companies listed on the stock market most generate the majority of their revenue from other industries.

Electro Optic Systems’ space division designs, manufactures and operates sensors and systems for space domain awareness (SDA) and control. To achieve this, Electro Optic Systems focuses on directional energy beams in the form of lasers, telescopes and beam directors.

Shareholders have not felt the love from holding Electro Optic Systems, with the EOS share price declining 80% year-to-date. This poor result occurred after the company’s earnings announcements repeatedly disappointed the market, despite net loss after tax declining 45% during 2021 to a loss of $14m.

5. The Boeing Company (BA)

Exchange: NYSE

Market Capitalisation: US$77.9b

Stock price (as of 23/09/22): US$131.26

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 62% / 38%

The Boeing Company (NYSE: BA) is one of the most well-known companies in the aerospace industry, manufacturing one of the most famous commercial jetliners, the Boeing 737. Boeing is also involved in many other industries, but the specific industry we will focus on is the space sector.

One of the staples of Boeing’s space division is its CST-100 Starliner, a ‘partially reusable’ spacecraft that transports crew to the International Space Station (ISS) and other LEO destinations. The CST-100 Starliner is manufactured for participation in NASA’s Commercial Crew Program.

With the creation of the U.S. Space Force, Boeing has increased its focus on the space industry, although the division continues to be lumped with defence and security. In 2021, this division generated US$27b in revenue, an increase of 1% year-on-year. The BA stock price has declined 36% year-to-date, largely due to problems the company has faced in its commercial airplanes and defence departments.

6. Lockheed Martin Corporation (LMT)

Exchange: NYSE

Market Capitalisation: US$109.5b

Stock price (as of 23/09/22): US$413.07

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 57% / 43%

You might know the Lockheed Martin Corporation (NYSE: LMT) as the developer of the most famous military aircraft of all time, the U.S. Air Force F-16 Fighting Falcon. At 18% of 2021’s US$67b revenue generated, the space division is a sizable portion of Lockheed Martin’s annual results. The space division is profitable, generating 15% of 2021’s US$7.4b operating profit.

One of the keys to Lockheed Martin’s space division's future is its Orion joint venture with NASA. The Orion Spacecraft is designed to take humans into deep space. This involves developing life support, navigation, communications, radiation shielding and the world’s largest heat shield that is of higher quality to withstand more extreme exposure for extended periods.

The Lockheed Martin share price gained 16% year-to-date, one of the few space stocks on our list with a positive return for the year. As of Q2 2022’s results, management forecast places the space division at 17% of 2022’s full-year revenue (US$65b) and 14% of its full-year operating profit of US$7.2b.

7. Astra Space Operations, Inc. (ASTR)

Exchange: NASDAQ

Market Capitalisation: US$172m

Stock price (as of 23/09/22): US$0.648

Stake Platform Bought / Sold (1 Jan 2022 - 23 Sep 2022): 67% / 33%

Astra Space Inc Com CL (NASDAQ: ASTR) says its mission is to ‘improve life on Earth from Space by creating a healthier and more connected planet’. The company attempts to achieve this through its two offerings; launch services and spacecraft engines. Combined, these two divisions generated US$0 in revenue during 2021, resulting in a net loss after tax of US$258m. Like Kleos, this was due to getting operations up and running, with Q1 2022 generating the company’s first revenue from its launch division. During Q2 2022, Astra expanded its revenue sources to include its space products division. Combined, these two divisions generated US$6.6m in revenue during H1 2022.

The launch division operates out of Kodiak, Alaska and Cape Canaveral, Florida, in the U.S. By 2024, Astra hopes to expand into a third base of operation in Saxavord in the UK. The launch offers targets payloads up to 600kg in LEO orbit.

The space products division designs and manufactures spacecraft engines. Its current product offering includes the Astra Spacecraft Engine (ASE) and Astra Spacecraft Engine Max (ASE Max). The engines are designed to operate on a wide range of satellites, from nanosatellites to those which provide satellite imagery to large communications satellites.

Despite revenue finally being generated in 2022, the market has been extremely bearish on the ASTR stock price, falling 91% year-to-date. The poor performance of this particular space stock seems to be mostly due to shifting valuations, increased market volatility, and the need for additional shareholder dilution before the profit horizon becomes more apparent.

Space stocks FAQs

Are space stocks a good investment?

While still a new industry, many space-related, publicly traded companies are either financially viable or are close. There are unique risks, like space debris, but the industry has developed to the point where it is worth a look. To get more information before investing in space, please read The Wrap: The Final Frontier For Profit.

What space stock ETFs are available to invest in?

Currently, only one space ETF is available on the Stake platform, ARK Space Exploration & Innovation ETF (ARKX). The industry is still new, and we expect additional ETFs to be created in the future.

Is SpaceX publicly traded?

SpaceX is not a publicly traded company. Based on previous comments by Elon Musk, it is unlikely SpaceX will ever join the list of top space stocks. However, the Starlink division will likely IPO within three to four years. However, his past comments are not always the best gauge when it comes to what Elon Musk will do in the future.

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.