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How much are space stocks worth?

This question popped into my mind last year as I watched shares of SPAC-sponsored space companies crater in price. Boosted by low interest rates and lots of free government stimulus money handed out during the pandemic, multiple space stocks with big dreams but tiny (or no) profits went "to the moon." But as the money dried up and the dreams toned down, share prices followed.

By 2023, most of these space SPACs were trading down 70%, 80%, and even 90% below their 2021 IPO prices -- which, to be honest, were probably overpriced. Now that a few years have passed, however, and these stocks have had time to grow into their valuations a bit, I think we finally have a handful that are worth considering as growth-at-a-reasonable price investments.

Here are my three top prospects: Intuitive Machines (NASDAQ: LUNR), Redwire (NYSE: RDW), and Spire Global (NYSE: SPIR).

1. Intuitive Machines

Tiny Intuitive Machines dominated headlines earlier this year when its Odysseus lunar lander became the first privately built spaceship to ever land on the moon. The stock's price gyrated wildly in the weeks surrounding this event, roughly tripling when the landing was first accomplished before subsiding on revelations that Odysseus didn't land 100% upright. The crazy thing is, just four months after the event, Intuitive Machines stock is trading right back around where it was before the landing took place -- under $4 a share and at a valuation of less than 1x trailing sales.

Don't get me wrong. This stock is not a sure thing. Intuitive only has about $55 million in cash and is burning $56 million a year. Still, with two more moon missions on the books, revenue is expected to nearly triple this year in comparison to 2023, then almost double again in 2025. Operating profits could turn positive next year as well.

At today's valuation, I see the stock having a lot of potential, and not much risk -- assuming it can raise enough cash to stay in business at all.

2. Redwire

Redwire is a second space stock that bears watching. One of just a handful of space companies named to assist with Jeff Bezos' Orbital Reef space station project, Redwire serves as a jack of all trades in space infrastructure building. Just this past month, it's scored contracts to build:

• Roll-Out Solar Array (ROSA) wings for European space giant Thales Alenia.
• A robotic arm for the European Space Agency's Argonaut lunar lander.
• And an air-breathing satellite for DARPA.

On the financial side of things, Redwire is a bit more expensive than Intuitive Machines at 1.4 times trailing sales (but still well below my estimate of the average valuation of unprofitable space stocks). Most attractive of all, Redwire is one of the very first space stocks to report positive free cash flow, generating $12 million in cash over the last 12 months.

If Redwire can keep that up, it could arguably be one of the best-priced space stocks out there today, and one of the only space stocks that will not need to conduct dilutive share offerings to keep itself solvent. As a plus for investors, Redwire should be one of the easiest space stocks to value going forward.

3. Spire Global

One of a growing number of space companies specializing in analysis of data generated by satellite imaging, Spire operates an asset-lite business model that could -- if it plays its cards right -- permit strong sales growth. A recent partnership with Nvidia to plug in Spire weather data to an Nvidia AI to train weather forecasting models illustrates this potential.

(That's right. You can kind of say that Spire is an artificial intelligence company now).

And that's only the most recent example. Spire's sales have already tripled over the past three years. As the business scales, analysts polled by S&P Global Market Intelligence forecast Spire could reach operating profitability as soon as next year.

Spire doesn't put out a lot of press releases. Its announcement of a satellite-based air traffic surveillance project (in cooperation with Thales) last week was its first such PR since the Nvidia announcement more than a month ago. Despite flying somewhat below the radar, the company is actually the most expensive of the three stocks profiled here today, costing 2.4 times trailing sales.

If I were to rank these three picks in order of attractiveness, I'd say I consider Redwire the safest bet on the strength of its free cash flow -- making it No. 1 on my list. More growth-focused investors might prefer Intuitive Machines based on its cheap valuation and potential for explosive sales growth, but it's No. 2 on my list.

That makes Spire Global No. 3. It's got potential, but I consider it more of a "show-me" stock for now.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.