Top 7 Space Stocks to Watch in 2023

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 had a mixed year in share prices so far this 2023, with some companies recovering after a tumultuous 2022.

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$469b in 2021, enticing corporations to enter the industry as market players. Citigroup ($C) forecasts the total annual revenue of the space industry to reach US$1t by 2040.

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 12 April 2023

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Here are the space stocks to watch

1. Rocket Lab USA Inc ($RKLB)

Exchange: NASDAQ

Market Capitalisation: US$1.9b

Stock price (as of 12/04/2023): US$4.07

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 60% / 40%

Rocket Lab USA is consistently one of Stake’s most popular stocks, trading more than Boeing and Lockheed Martin combined. Founded in 2006, Rocket Lab provides launch services, spacecraft and launch components, and on-orbit management.

As of April 2023, Rocket Lab has completed 35 launches, deployed several 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$211m in revenue in 2022 – a 239% year-on-year growth from 2021. Despite its stunning increase in revenues, however, the company still finished the year with a net loss of US$136m.

The RKLB stock price took a nose dive during 2022, ending the year down 69%, however, it has slightly recovered since then. The drop was not particularly surprising for analysts, considering how higher interest rates increased the risk-free rate, reducing the premium the market places on unprofitable companies. Still, it’s important to note that Rocket Lab’s increase in net loss after tax was primarily due to a 52% increase in research and development and a 23.4% increase in selling, general and administrative expenses year-on-year, which can be seen as necessary expenses for the growth of Rocket Lab. The majority of Stake's customers remain optimistic, with a higher proportion of trades on the buy side.

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

2. Kleos Space S.A ($KSS)

Exchange: ASX

Market Capitalisation: A$22.14m

Stock price (as of 12/04/2023): A$0.12

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 87% / 13%

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 January 2023 aboard the Transporter-6 SpaceX mission and continued the company’s track record in achieving a stable LEO orbit. The company's end goal is to develop and deploy 20 clusters.

While the company has a unique and interesting business model, Kleos' auditor raises a going concern doubt on the company last February. This contributed to investors pulling out of the stock, resulting in the -42.50% plummet in share price from the start of 2023. Despite that, Kleos has been able to raise $3m in another equity offering earlier this year, so it still remains a company to watch.

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$1.0b

Stock price (as of 12/04/2023): US$3.58

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 63% / 37%

Investors have not been happy during 2022, with Virgin Galactic stock declining 74% in the year. This result isn’t surprising because of the unprofitable space stocks we have already covered. Additionally, Virgin Galactic's share price rocketed (pun intended) between 2020 and 2021, gaining over 300%. The share price falls continuing this 2023 may be considered a correction.

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 FY2022, Virgin Galactic generated US$2.3m, a decline of approximately 30% 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: A$104.45m

Stock price (as of 12/04/2023): A$0.62

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 53% / 47%

Electro Optic Systems Holdings has three key divisions: space, defence, and communications. Here we will focus on the space division, generating 23% of 2022's $138m in revenue. This may seem like an insignificant source of revenue, but when it comes to space, companies listed on the stock market mostly generate the majority of their revenue from other industries as they continue to develop their products related to space.

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 75% in the last 12 months. This poor result occurred after the company’s earnings announcements repeatedly disappointed the market, especially after net loss grew from A$13m in FY2021 to A$114m in FY2022.

5. The Boeing Company ($BA)

Exchange: NYSE

Market Capitalisation: US$127.2b

Stock price (as of 12/04/2023): US$212.32

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 31% / 69%

The Boeing Company 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 2022, this division generated US$23b in revenue, out of the company's total revenue of US$66b. The BA stock price has declined 5.4% over 2022, largely due to problems the company has faced in its commercial airplanes and defence departments, however it has pretty much recovered this year.

6. Lockheed Martin Corporation ($LMT)

Exchange: NYSE

Market Capitalisation: US$124.16b

Stock price (as of 12/04/2023): US$487.84

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 55% / 45%

You might know the Lockheed Martin Corporation as the developer of the most famous military aircraft of all time, the U.S. Air Force F-16 Fighting Falcon. At 17.4% of 2022’s US$66b revenue generated, the space division is a sizable portion of Lockheed Martin’s annual results. The space division is profitable as well, unlike most other space companies on this list, generating 14.4% of 2022’s US$7.2b 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 37% in 2022 and continues to increase this year – one of the few space stocks on our list with a positive return over the tumultuous 2022. This is unsurprising, given that Lockheed Martin's financials have been going very strong.

7. Astra Space Operations, Inc. ($ASTR)

Exchange: NASDAQ

Market Capitalisation: US$106.39m

Stock price (as of 12/04/2023): US$0.39

Stake Platform Bought / Sold (1 Jan 2023 - 31 March 2023): 62% / 38%

Astra Space Inc Com CL 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. 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 being founded back in 2016, ASTR actually did not make any revenue until FY2022. Like Kleos, this was due to getting operations up and running. Given that, the company relied on investor capital to keep it afloat. While it finally generated US$9.4m in revenues last year, it ended the year by widening its net loss from US$258m in 2021 to US$411m last year.

Unsurprisingly, the market has been extremely bearish on the ASTR stock price, falling 94% all throughout 2022, and an additional 13.65% this 2023. Analysts continue to expect ASTR to report net losses in the next 4 years, and thus any investment in this company at this stage would be considered a risky move.

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 two space ETFs are available on the Stake platform, the ARK Space Exploration & Innovation ETF ($ARKX) and the Procure Space ETF ($UFO). 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.