On Tuesday, Canaccord Genuity adjusted its price target for Intuitive Machines Inc. (NASDAQ:LUNR), reducing it to $11.00 from the previous $14.00, while still recommending a Buy rating for the stock. Intuitive Machines, which specializes in aerospace and lunar exploration technology, reported first-quarter revenues for 2024 amounting to $73.1 million. This figure represents a substantial year-over-year increase of 301% and surpasses estimates by 13%.
The company's gross margin also saw significant improvement, moving into positive territory with a sequential increase of 1,180 basis points from the fourth quarter of 2023, reaching 16.6%. This margin enhancement is largely attributed to the successful completion of performance milestones for the IM-1 lunar mission, which garnered payments from NASA and other commercial clients.
NASA's contribution to Intuitive Machines' revenue was notably substantial, as the space agency paid the company more than 100% of the expected milestone awards. This payment was facilitated by Intuitive Machines providing lunar regolith plume imagery from an onboard camera, which compensated for a NASA payload that failed to collect similar data during the lunar touchdown.
In addition to revenue growth, Intuitive Machines reported a decrease in operating cash flow usage to ($6.4 million) in the first quarter of 2024, a reduction of $12.2 million. The company's management credits the OMES III program, which pays monthly for engineering services, for this financial improvement. The current cash balance stands at $55.2 million, which is expected to be sufficient to support existing operations through the end of the year. However, management has indicated a readiness to enter the capital markets "opportunistically" if additional "defensive capital" is required to support key programs or secure new program wins.
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