When the decade-long Apollo program ran its course and successfully landed the first humans on the Moon, there were no investors to partake in this history. The stake was indirect through taxation as the program was 100% government funded.
This changes with Intuitive Machines Inc (NASDAQ:LUNR). On Tuesday, as one of the company’s latest government contracts, IM received the record-breaking $4.82 billion in NASA funding over five years under the Near Space Network (NSN) contract.
Since our last Intuitive Machines coverage on September 2nd, LUNR stock has gone up from $4.97 to $8.65 per share, netting investors 74% (unrealized) gains. At that time, it was clear that the company was the main beneficiary of NASA funding for the Moon revisit, and this would likely continue.
Now that this scenario materializes, is LUNR stock still worth a buy? But first, what do American taxpayers pay Intuitive Machines to do?
Details of the $4.82 Billion Near Space Network (NSN) Contract
On top of its baseline five-year period, the contract has optional doubling potential for another five years. Starting from October 1st 2024 to September 30th 2034 as the final end-point, the contract drives Intuitive Machines funding in three directions.
First, boosting the company’s funding to support greater lander payload capacity and delivery. In February 2024, Intuitive Machines completed the first privately developed landing on the Moon with the Nova-C lander, dubbed Odysseus, under the IM-1 mission.
Weighing nearly 2 tons and 4m tall, the vessel used liquid methane and liquid oxygen (methalox) in addition to generating 200W from solar panels when it landed to deliver 12 payloads worth of instruments. This included the 125-stainless steel balls sculpture Moon Phases by Jeff Koons.
The Japanese commercial counterpart to Intuitive Machines, startup iSpace, failed to do the same with its Hakuto-R lander in April 2023, despite being nearly half the size and weight.
Second, the NASA contract will fund Intuitive Machines’ deployment of microsatellites to map the Moon’s surface in 4K resolution. This will go a long way in detecting just the right landing sites for future landers. In turn, it should make scientific instruments more effective when they are deployed on more interesting locations.
Lastly, Intuitive Machines will use the $4.82 budget to develop infrastructure, logistics and mapping solutions to facilitate the Moon’s exploration.
Is Intuitive Machines also a SpaceX Exposure?
Still not publicly traded, Elon Musk’s SpaceX is the main facilitator of renewed lunar exploration. The medium-lift Falcon 9 rocket delivered the Nova-C (Odysseus) lander. The first lunar satellite is scheduled for late 2025 under the IM-3 mission.
Within the NSN scope, Boeing (NYSE:BA) Starliner was supposed to deliver two astronauts to the International Space Station (ISS) and back from a short 8-day visit in June. Still stranded, Suni Williams and Butch Wilmore now rely on SpaceX to return them home in February 2025 via the SpaceX Crew Dragon capsule.
In other words, as taxpayers fund NASA, NASA funds Intuitive Machines, which then pays SpaceX for future launches for the Commercial Lunar Payload Services (CLPS) initiative. By the same token, it is the dependability of SpaceX rockets that will ultimately drive LUNR valuation.
Intuitive Machines Investing Proposition
It is likely that the value of Intuitive Machines stock will now grow simply on the basis of exposure to historical undertaking. As a matter of national pride, each news item should boost more investor participation.
This is why it is difficult to gauge the company’s prospects, government-funded as it is. In late Q4 2024, IM will undertake the IM-2 mission, forecasting “20 times better precision”, according to IM CEO Stephen Altemus.
The company will upgrade Nova-C lander to that effect without it having an impact on schedule. Outside of mere landers, IM is also looking to secure a rover contract from NASA as a part of the agency’s Lunar Terrain Vehicle (LTV) Services project.
Although IM gained $30 million for LTV in April, this was the first feasibility step. With the latest $4.82 billion funding, included for more exciting lunar exploration via rover, it is not difficult to see this would do wonders for satellite-driven 4K resolution to draw in even more investors.
At the moment, 12.30% of LUNR shares are held by insiders, while 31% are held by institutions. Although a botched mission could drive LUNR stock into a downfall, this will likely be a coveted “buy the dip” opportunity, given the long span of time IM has at its disposal.
Vice-versa, today’s LUNR stock may seem like the very bottom by the time the IM-3 mission rolls out in late 2025 and is successfully completed.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.