NASA Overhauls Its Lunar Programme, Space Technology Shares Feel the Impact

At the Ignition event (24/03), NASA announced it is postponing the Lunar Gateway programme, valued at billions of dollars, to redirect resources towards building a permanent base on the Moon’s surface. Although the delay in the Gateway is noteworthy for MDA shares, where its space robotics technology plays a role in the transit station, one Morgan Stanley analyst noted that accelerating the pace of lunar landing missions will benefit other players in the commercial space industry. NASA’s plan to significantly increase activity on the Moon includes utilising the Commercial Lunar Payload Services (CLPS) programme in Phase 1 of the lunar base construction. This development positions Firefly Aerospace favourably, as the company was the first to successfully land a commercial spacecraft on the Moon’s surface last year using CLPS funding. Firefly reportedly achieved Q4 revenues of US$57.7 million, surpassing analyst expectations for earnings per share. Following these results, Cantor Fitzgerald and Goldman Sachs lowered their price targets for the company’s shares. Morgan Stanley also identified opportunities for Firefly’s Elytra technology offering in line with NASA’s development of lunar communication infrastructure to support increased mission tempo and future lunar base operations. For investors, besides Firefly benefiting from NASA’s mission changes, Intuitive Machines also experienced a sharp surge after securing a CLPS contract from NASA worth US$180.4 million to deliver a lunar rover and various payloads to the Moon’s South Pole. On Wednesday (25/03), LUNR shares jumped sharply by up to 19.8% until 10:15 ET after winning NASA’s fifth lunar landing contract known as “IM-5.” In that mission, Intuitive Machines will use the new Nova-D vehicle and deliver seven science and technology payloads, including a lunar rover from Blue Origin, Honeybee Robotics, and the Australian Space Agency. Intuitive Machines will also test Space Data Network (SDN) technology as part of a previous US$4.8 billion NASA contract won by the company. Analysis from Simply Wall Street estimates relative upside potential as LUNR shares trade around 20% below the analyst target of US$22.50. LUNR is also projected to return 2.1% gains over the next 30 days. Nevertheless, the primary consideration for LUNR shares should remain observing the impact of NASA contracts on future revenues and profits. Additionally, there remains a major risk from the highly volatile share price.