3 Stocks Still Under $50 Before the SpaceX IPO

Key Concepts

• Space Economy: The growing sector of commercial space exploration, satellite deployment, and infrastructure.
• "Picks and Shovels" Strategy: Investing in companies that provide essential services, hardware, or infrastructure to the broader industry rather than betting on a single end-user or explorer.
• SpaceX IPO: The highly anticipated initial public offering of SpaceX, acting as a major market catalyst.
• S-1 Filing: The registration document filed with the SEC by a company planning an IPO.
• Short Interest: The percentage of a company's stock that has been sold short by investors; high short interest can lead to "short squeezes" where rapid price increases force short-sellers to buy back shares.
• Book-to-Bill Ratio: A ratio of orders received to units shipped and billed; a ratio above 1.0 indicates strong demand.
• FOMO (Fear Of Missing Out): The psychological driver causing investors to buy into assets during rapid price spikes.

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1. Market Context: The SpaceX Effect

The space sector is currently experiencing a massive influx of investment and momentum driven by the upcoming SpaceX IPO, expected in June. Analysts suggest that while the hype is significant, investors should adopt a "picks and shovels" approach—targeting companies that provide vital services to SpaceX and the broader space industry, regardless of the specific success of individual exploration missions.

2. Featured Space Stocks (Under $50)

Momentus (MNTTS)

• Core Business: Operates the "Vigoride" orbital service vehicle, which acts as an "Uber for satellites," transporting payloads from SpaceX rockets to their precise final orbits.
• Key Details: A small-cap company founded in 2017 with contracts from DARPA and NASA.
• Financials: High risk; generated ~$3 million in revenue last quarter. The company is currently burning cash, making the speed of revenue growth versus cash burn the critical metric for long-term viability.
• Market Dynamics: Experienced a 73% single-day spike. The stock has high short interest (~20% of float), which amplifies volatility.

Redwire (RDW)

• Core Business: A space infrastructure company providing hardware such as optical imaging systems, sun sensors, and camera technologies.
• SpaceX/NASA Tie-in: Supplies hardware for SpaceX’s Starship, which is utilized for the Artemis missions (lunar landings).
• Financials: Strong growth trajectory. 2026 revenue guidance is $450M–$500M (approx. 41% growth). The company boasts a book-to-bill ratio of 1.9, indicating a backlog of $498M (up 71% year-over-year).
• Market Dynamics: Trading above its consensus price target of $14. Analysts note the stock is currently overbought, suggesting a potential pullback.

Intuitive Machines (LUNR)

• Core Business: A Houston-based exploration company known for lunar landers that deliver NASA payloads to the moon.
• Strategic Shift: Moving toward a "multi-domain" space company, recently acquiring Lantteras to expand its portfolio.
• Financials: Market cap of ~$9.5 billion. Despite missing revenue expectations in early May and reporting wider-than-expected losses, analyst price targets remain bullish (e.g., Caner Fitzgerald at $43, B. Riley at $45).
• Market Dynamics: Up 285% over the last year. The company’s balance sheet is currently stressed due to recent acquisitions.

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3. Investment Methodology & Framework

• The "Buy the Rumor, Sell the News" Framework: Analysts warn that stocks often run up ahead of an IPO and experience a correction once the IPO actually debuts.
• Risk Management: For volatile stocks, analysts suggest:
  • Sizing Positions: Instead of going "all in," take a small position and add to it on pullbacks to lower the average cost.
  • Watchlist Strategy: If a stock is in a "FOMO frenzy," it is often better to wait for the hype to fade and the sector to quiet down before entering.
• Evaluation Criteria: Investors should prioritize companies with firm, contracted backlogs and clear paths to revenue growth that outpace cash burn.

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4. Notable Quotes

• "Not every company that was looking for gold struck gold, but there were a lot of companies that sold the picks and shovels to the miners that made a lot of money." — Chris Marotch, on the investment strategy for the space sector.
• "It’s a race going on between how quickly they can grow revenue versus how much they’re burning cash." — Chris Marotch, regarding the financial health of speculative space companies.

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5. Synthesis and Conclusion

The space economy is currently in a high-momentum phase driven by the anticipation of the SpaceX IPO. While companies like Momentus, Redwire, and Intuitive Machines offer significant growth potential through their roles as infrastructure and service providers, they are currently experiencing extreme volatility and "overbought" conditions. The consensus advice is to exercise caution, avoid buying into pure FOMO, and look for entry points during inevitable market pullbacks. Investors should focus on the underlying fundamentals—specifically revenue growth, contract backlogs, and cash management—rather than short-term price spikes.