Intuitive Machines (LUNR) recently reported impressive first-quarter financial results, and the space company continues to have many potentially lucrative “shots on goal.”
Still, the company recently suffered a key setback that may foreshadow significant problems in the future, while the stock’s valuation is rather elevated, given its high risk, despite its recent pullback.
While the company’s long-term opportunities remain significant, the recent risks suggest investors may want to lock in gains and await further developments.
Encouraging Q1 Earnings and Strong, Potential Catalysts
Helped by LUNR’s January 2026 acquisition of spacecraft builder Lanteris, LUNR’s revenue nearly tripled in Q1 versus the same quarter a year earlier to $186.7 million. Additionally, for the first time, it reported positive EBITDA, excluding certain items. Specifically, its Q1 adjusted EBITDA came in at $2.7 million. Meanwhile, LUNR obtained nearly $430 million of new contracts last quarter, bringing its backlog to a record $1.1 billion.
Also in Q1, Intuitive was tapped by the Space Force to compete for the right “to design and field next generation space domain awareness capabilities to detect, track, and characterize objects in geosynchronous orbit.” The total contracts awarded in conjunction with this framework could be worth as much as $6.24 billion over a decade.
And as I reported in my previous column on LUNR stock, published on April 1, the company is building communications systems in space that should generate a great deal of demand over the longer term, while it’s also well-positioned to benefit from the proliferation of satellites and the Trump administration’s missile-defense initiatives.
Finally, the firm obtained a $180 million deal to provide a fifth lunar lander to NASA and could become involved in the agency’s future missions to Mars.
A Worrisome Development and LUNR’s High Valuation
In May, Intuitive Machines failed to obtain contracts from NASA involving the delivery of lunar rovers and landers. Given the company’s multiple, past difficulties involving lunar landers, NASA’s decision to avoid selecting the company for this deal could indicate that the agency is having serious doubts about LUNR’s ability to provide infrastructure for lunar missions. There’s even a significant, though not a high, chance that NASA has suddenly become disillusioned about the firm’s work in general.
While the former scenario would likely put a meaningful dent in Intuitive Machines’ future growth, the latter scenario would likely be disastrous for the firm and for LUNR stock.
Between April 1, when my previous column was published, and May 27, LUNR stock nearly doubled, soaring from $20.24 to $40.34. A great deal of the name’s recent momentum was likely unrelated to LUNR’s fundamentals, but rather to the upcoming IPO of SpaceX.
After a subsequent pullback, LUNR stock is changing hands at a forward price-sales ratio of 4.6 times, based on analysts’ average 2026 sales estimate for the firm.
While that’s not an extremely high valuation, it seems overly elevated, given the red flags raised by NASA’s recent decision.
*This article is intended to be informational only; it is not financial advice.
