The international space race is heating up, and a wave of new space stocks hit the public market in 2021. Unfortunately for investors, the share prices of all but one of those space stocks are suffering from a major failure to launch.
Rocket Lab’s Liftoff: On Monday, Bank of America analyst Ronald Epstein recapped some of the latest developments in the space race and pointed out that of the 10 space stocks that went public in 2021 via IPO or SPAC merger, only Rocket Lab USA Inc (NASDAQ:RKLB) is still trading above its initial listing price. In fact, the 10 space stocks on average are down 37.3% since going public.
Related Link: Space Race Heating Up: Analyst Recaps Latest Developments From SpaceX, Rocket Lab & Others
Momentus Inc (NASDAQ:MNTS) and Spire Global Inc (NYSE:SPIR) are the two worst performing stocks of the group and are each down more than 60%.
“We also found that much of the enthusiasm surrounding space companies has been driven by retail investors, with institutional interest lacking given the pre-earnings and cash flow negative nature of most space companies,” Epstein said.
Rocket Lab is the lone exception and has even outperformed the Russell 2000 small cap index, gaining 18% since going public in August 2021.
Neutron Update: In December, Rocket gave investors their first update on its Neutron launch vehicle development since its SPAC merger. The Neutron is being designed with reusability as a top priority and will feature reusable fairings that will not separate from the first stage. Instead, the fairings will open to deploy the upper stage, which will be the lightest launch vehicle ever deployed into space.
Bank of America has a “buy” rating and $20 price target for RKLB stock.
Benzinga’s Take: It’s still extremely early to pick one or more long-term winners among stocks with exposure to the space race. Investors should expect more extreme volatility in the space group in coming years and fully understand the risk that comes along with investing in companies this early in the development stage.
Also See: Space ETF Adds 8 New Companies Including 7 That Completed SPAC Mergers: What Investors Should Know
Photo: Courtesy of rocketlabusa.com