In this article, I’ve put together a list of space stocks I believe are the best buys at today’s prices. These companies should be on every investor’s watch list due to their disruptive potential.
So, here are the best space stocks to consider.
Virgin Galactic (SPCE)
Virgin Galactic (NYSE:SPCE) is a spaceflight company within the Virgin Group, aiming to provide suborbital spaceflights to space tourists.
Now might be a great time for investors to invest in SPCE stock. The reason is that its Galactic 06 space mission is due to launch near the end of this month. The mission will carry four astronauts, and I expect it will ramp up interest in spaceflight globally.
Meanwhile, from a fundamental perspective, SPCE may also be undervalued. Analysts collectively predict its share has an implied 26.6% upside from its present levels.
Since space flight is still in its very early stages, SPCE has yet to become cash flow positive, as it recorded a negative cash flow of $514.25 million for the last 12 months. But as missions like Galactic 06 ramp up in frequency and duration, I expect more investors will take notice of the collective potential of space stocks, which will be accretive for Virgin Galactic.
Boeing (BA)
Boeing (NYSE:BA), to me, can be considered a kind of picks and shovels supplier to the space industry. It’s a key contractor for NASA and is also working on its own spacecraft, the Starliner.
The Starliner test flight is expected to be made in April, while its first operational flight could be as early as 2025. The main use of the spacecraft will be to transport astronauts to the International Space Station — a key divergence from shuttles.
To me, BA stock is a great buy in general while also keeping its growth as one of those space stocks in one’s back pocket. Namely, Wall Street rates Boeing as a Strong Buy. That recommendation also comes with a modest price target increase of around 4% over the next 12 months.
Although BA stock’s P/E ratio is currently negative, its forward price-to-sales ratio is lower than its trailing 12-month price-to-sales ratio. That means its share could be trading hands at a discount to what analysts expect as fair value.
Northrop Grumman (NOC)
Northrop Grumman (NYSE:NOC) is deeply involved in space technology and exploration. Its core areas of expertise are in satellite technology and robotics, and the company previously worked with NASA during various missions.
NOC is primarily a defense stock, but its engagements in space have also recently included collaborations with the Air Force Research Laboratory to integrate commercial space internet into airborne platforms.
To put this project into simple turns, it plans on reconfiguring existing satellite constellations to allow them to be used for military purposes, such as in warfighters.
NOC is a solid defense pick based on its quarterly results. Its third-quarter earnings rose about 5% to $6.18 per share, with a 9% revenue growth reaching $9.78 billion. That performance exceeded analyst expectations.
The company also increased its full-year sales forecast to $39 billion, up from the earlier range of $38.4 billion to $38.8 billion.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.