The space industry has experienced a resurgence over the past few years as private companies like Elon Musk’s SpaceX and Jeff Bezos’ BlueOrigin have made huge inroads in the space industry. It appears that starting massively popular companies like Tesla and Amazon — as well as being a billionaire — is a pretty good resume for starting space exploration companies.
SpaceX’s reusable Falcon 9 rocket has successfully shuttled American astronauts to the International Space Station (ISS), launched thousands of satellites into orbit for Internet services, and most recently launched and landed its massive Starship rocket that could one day take astronauts to Mars.
BlueOrigin, for its part, has launched satellites for private companies, has plans to launch a space tourism service in the future, and is working with NASA and other companies to build its Blue Moon lunar lander, which could one day be used to put astronauts back on the moon.
At least for now, these two companies aren’t yet publicly traded. But that doesn’t mean that investors don’t have great opportunities to tap into the massive global space industry market that’s estimated to be worth $1 trillion by 2040, according to Morgan Stanley research.
5 Best Space Stocks for 2022
1. Virgin Galactic Stock: In a Stratosphere Of Its Own
It’s nearly impossible to begin a conversation about space stocks without first talking about the only publicly-traded company whose primary business is to send people into space — Virgin Galactic (NYSE: SPCE).
Virgin Galactic’s core business is space tourism. Right now, the company has 600 customers who’ve paid $250,000 per ticket to fly into space on Virgin’s SpaceShipTwo suborbital spaceplane.
Virgin Galactic hasn’t launched any of its customers into space just yet, but the company has done extensive test flights of its planes and aims to have commercial flights beginning sometime later this year.
The lack of commercial flights hasn’t deterred investors one bit though. Virgin’s share price has jumped 192% since the company went public back in late 2019.
The company’s share price has taken a hit recently as some investors have grown concerned about launch delays and the fact that the company had just $238,000 in revenue in 2020 and a net loss of $273 million.
Despite the recent share price volatility and some minor setbacks, Virgin Galactic is still one of the best pure-play space stock investments you can make.
And with the company already considering using some of its technology for potential hypersonic passenger travel in a partnership with Boeing, Virgin is building out its leading position in the public space market.
2. Boeing Stock: The Space Stock With a Long History
Boeing (NYSE: BA) wins for being the space stock that’s been around the longest, considering that the company built the first stage of the Saturn V rocket — which helped propel astronauts to the moon.
And the company’s long-standing partnership with NASA — and its potential to benefit from its new space endeavors — still exists today. Boeing is building the core stage of NASA’s Space Launch System (SLS), which is designed to be the foundation for NASA’s future deep-space mission, including its return to the moon.
While Boeing has experienced some setbacks with the SLS recently, it’s nowhere near finished working with NASA on the project.
Additionally, the company has developed a Space Shuttle-like space plane called the X-37. The spacecraft is autonomous, un-manned, lands like a plane, and is being used by the United States Air Force.
Why does all of this matter? Because the U.S. government is focusing its attention once again on space — and is pouring money into new projects.
The newest branch of the U.S. military, Space Force, has an estimated 2021 budget of $15 billion and NASA’s fiscal 2021 budget is nearly $25 billion.
Boeing’s ongoing partnerships with multiple U.S. government departments, which are investing in big space-related projects, make the company a key player among space stocks.
3. Iridium Communications Stock: A Satellite Stock With to-the-Moon Returns
If you’re looking for a space stock that offers a different angle than rockets, space tourism, or spacecrafts then Iridium Communications (Nasdaq: IRDM) may be a good fit.
Iridium is a satellite communications company that sells its services to both governments and the private sector — and over the past few years, its business has boomed.
Two years ago the company finished launching its NEXT satellite network into space and the company has been collecting cash from it ever since. For example, Iridium’s total estimated free cash flow for 2021 is $232 million.
Investors have been excited about Iridium and pushed the stock up 260% over the past three years. To put those gains in perspective, consider that popular tech stocks Apple and Amazon only gained 172% and 97%, respectively, over the same period.
One potential growth area for the company is the expanding Internet of Things (IoT) market, which connects formerly unconnected devices to the Internet. The company says that its Iridium CloudConnect is the “first and only satellite cloud-based solution” that has global coverage for IoT applications through Amazon Web Services (AWS).
SpaceX’s Starlink could eventually become a key competitor with Iridium, so investors should keep tabs on what Elon Musk’s company is doing in this space. But for now, Iridium is benefiting as a leading player in the satellite communications market.
4. Lockheed Martin Stock: An Aerospace Giant with Rocketing Opportunities
Lockheed Martin (NYSE: LMT), a dominant force in the aerospace market, hasn’t always been considered a top space stock contender, but all of that’s changed recently.
At the end of last year, Lockheed announced that it would acquire the rocket company Aerojet Rocketdyne (AJRD) for $5 billion. Aerojet is the real deal when it comes to rockets — the company built the main rocket in the Space Shuttle and is working on the rockets for the new NASA SLS.
Lockheed said that the “transaction enhances Lockheed Martin’s support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology.”
While $5 billion is a hefty price tag, Aerojet’s business will give Lockheed more exposure to the SLS project. Once the deal closes, likely by mid-2021, Lockheed will not only make the Origin capsule for SLS, but will also own the rocket company that propels the massive spacecraft as well.
Admittedly, Lockheed’s stock hasn’t performed all that well over the past few years, but buying Aerojet Rocketdyne could help the company boost its space revenue. Aerojet’s 2019 sales reached an impressive $2 billion.
And, if the SLS project takes off, the acquisition could add even more long-term revenue opportunities for the aerospace giant.
5. Procure Space ETF: A Diversified Space Exploration Investment
Finally, if you’re looking for a way to invest in space exploration without having to pick just one single winner, then you may want to consider a space exchange-traded fund (ETF), like Procure Space ETF (Nasdaq: UFO).
This ETF is listed on the Nasdaq exchange and invests mainly in companies that generate at least 50% of their revenue or profit from the space industry.
If you’re unfamiliar with ETFs like these, they spread out an investor’s exposure to the market by investing in many companies, instead of just one. For Procure Space, it means that investors will have exposure to multiple space stocks, including Virgin Galactic, Honeywell, Iridium, Lockheed Martin, and many others.
Since its inception, back in 2019, the fund has gained about 20%. That may seem modest compared to the S&P 500’s gains, but this space ETF has the potential to keep growing as all of these companies expand further into the market.
Investors may soon have another space fund to choose from as Ark Investment recently filed paperwork with the U.S. Securities and Exchange Commission (SEC) for a space exploration ETF, under the ticker symbol ARKX.
Space Stock Risks: Two Things That Could Ground Share Price Gains
Some of the space stocks listed here are betting big on NASA’s Space Launch System (SLS). But like every big government project, there’s always a risk of funding drying up or the project being scrapped altogether.
The SLS program has had a few setbacks, most recently during a test of the SLS’s main engines. But, as of right now, NASA is still targeting the first flight of the unmanned Artemis I mission, using SLS, in November 2021.
Additionally, investors should know that share prices of space stocks can sometimes swing wildly depending on whether or not launches, flight tests, rocket tests, etc. go well or not.
These risks don’t mean that space stocks aren’t worth investing in, but investors should know that space exploration is an expensive and slow-moving industry — that often faces lots of technical hurdles — so investors should be cautious and patient when investing in this market.
7 Important Space Stock Statistics
- $350 billion: The current size of the global space industry
- $1 trillion: How much the global space industry market will be worth by 2040
- 2020: The year of the U.S. first manned spaceflight mission to the International Space Station from U.S. soil since 2011, marking a new era in private/public space enterprise
- 50%: The projected growth of the global space economy that will come from satellite broadband
- $60 million: The cost to launch a satellite into space, down from $200 million thanks to reusable rockets
- $15 billion: The size of the U.S. Space Force budget in 2021
- $25 billion: NASA’s estimated 2021 budget
Recent IPO and SPACs of Space Companies
In 2021 there has been an unprecedented wave of space companies looking to go public via either IPOs or SPACs. Let’s look at a few of the most interesting companies.
- Rocket Labs: The company recently announced a merger with Vector Acquisition Corp. (Nasdaq: VACQ). After the merger closes in the second quarter Rocket Labs will trade under the ticker symbol RKLB.
- Astra Space: A competitor of Rocket Lab’s that recently announced its own merger with Holicity Inc. (Nasdasq: HOL) for north of $2 billion, Astra completed its first commercial launch within just four years of its founding and is targeting 300+ launches per year at scale.
- Blacksky: Is merging with Osprey Technology (Nasdq: SFTW). The satellite imaging company is being valued at $1.5 billion and plans to utilize the proceeds to launch 30 imaging satellites. Once its merger completes, the company will trade under BKSY.
- Spire Global: Has announced a merger with NavSight Holdings, Inc. (NYSE: NSH) and will trade under the ticker symbol SPIR in the future. The company has positioned itself as a “SaaS company” in the space market.
Private Space Companies To Watch
While we’ve focused on space stocks that are publicly traded today, the truth is that many of the most exciting space companies remain private. We’ve built hubs on a number of the most exciting space companies that you can access below.
- SpaceX: Elon Musk’s rocket company was recently valued at $74 billion. With plans to send tourists into space by the end of 2021, manned missions to the moon in 2022, and humans to Mars by 2026, SpaceX is an extremely compelling company. However, Elon Musk has signaled he doesn’t plan on SpaceX IPOing in the near future.
- Starlink: While a SpaceX stock might not be coming anytime soon, Elon Musk has indicated a Starlink IPO will happen once the company can “predict cash flow reasonably well.” Why is Starlink such a compelling opportunity? For one, the market size of satellite Internet may be multiples higher than SpaceX’s commercial launch business. The company recently began widespread sales of its service. With Wall Street estimating that Starlink could be worth more than 80% of SpaceX’s value, a Starlink IPO could give investors ownership of the most impressive asset in the 21st-century space race.
- Blue Origin: The SpaceX competitor that was founded by Jeff Bezos. Amazon’s founder has committed to spending $1 billion a year to fund the company. While Blue Origin may be behind SpaceX in many key areas, with Bezos stepping aside from his CEO role, he could devote more time and attention to Blue Origin becoming his “second act.” It’s unlikely the company will IPO as Bezos has deep pockets and is among the world’s richest billionaires. However, as Blue Oreigin succeeds, the broader space industry is likely to ride on its coattails as well.
Frequently Asked Questions
Is SpaceX publicly traded?
Nope, at least not right now. SpaceX founder Elon Musk has said that he eventually intends to take SpaceX’s satellite internet business, Starlink, public “Once we can predict cash flow reasonably well.” But there are no current plans for SpaceX to be publicly traded on any stock exchanges right now. SpaceX’s current valuation is around $74 billion, based on its latest funding round.
Is Virgin Galactic stock a good buy?
Virgin Galactic’s stock price skyrocketed 41% in 2020, but the company has very little revenue and had a net loss of $273 million in 2020. The company’s losses and lack of sales don’t make it’s stock a bad investment, but investors should understand that buying Virgin Galactic stock is a big bet on the company’s future earnings.
What is the best overall space company?
This depends on what type of space stock investors want to invest in. If you’re looking for space pure-play then Virgin Galactic may be the best company for you. But if you’re looking to diversify your space investments, then the upcoming ARK Investment space exploration ETF, or the current Procure Space ETF, may be a better bet for you.
Can you buy stock in SpaceX?
No. As of March 18, 2021, you cannot purchase SpaceX stock on any public stock exchanges. SpaceX CEO … um, Technoking Elon Musk (also the co-founder of Tesla) hasn’t announced any plans to take the company public, but he has said that he wants SpaceX’s Starlink satellite internet company to eventually IPO.