Triumph Group Q2 Earnings Beat Estimates, Sales Increase Y/Y

Intuitive Machines, Inc. LUNR is slated to report third-quarter 2024 results on Nov. 14, before market open.

See the Zacks Earnings Calendar to stay ahead of market-making news.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $52.4 million, implying 311.4% growth from the year-ago quarter's reported figure. The consensus mark for third-quarter earnings is pegged at a loss of 13 cents per share, suggesting an improvement from a loss of 22 cents in the prior-year quarter. The bottom-line estimate has remained unchanged in the past 60 days.

LUNR does not boast a very impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in the last reported quarter, with a surprise of 64.29%. LUNR has a trailing four-quarter average negative earnings surprise of 15.18%.

Earnings Whisper for LUNR Stock

Our proven model does not conclusively predict an earnings beat for LUNR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

LUNR has a Zacks Rank #3 and an Earnings ESP of 0.00% at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LUNR’s Q3 Results: Key Factors to Consider

During the to-be-reported quarter, Intuitive Machines secured a handful of notable contracts, which can be expected to have boosted its order book and, thereby, the backlog count. This should get reflected in LUNR’s upcoming quarterly results.

Evidently, in September 2024, LUNR won a contract from NASA for communication and navigation services for missions in the near space region, which extends from Earth’s surface to beyond the Moon. The contract has a maximum potential value of $4.82 billion.

In August, the company clinched a $116.9 million NASA contract to deliver six science and technology payloads, including one European Space Agency-led drill suite, to the Moon’s South Pole.

Notably, NASA and other commercial payload contracts associated with the IM-1, IM-2 and IM-3 lunar payload missions, clinched by LUNR in the previous quarters, can be expected to have bolstered its revenues in the third quarter.

Also, the OMES III contract, for which the company provides engineering services to the Landsat Servicing mission at the Goddard Space Flight Center in Maryland, is likely to have aided its overall quarterly top-line performance.

On the cost front, higher cost of revenues and general and administrative expenses, due to growth in LUNR’s business operations, might have had some negative impact on its earnings performance.

Nevertheless, solid revenue expectations and profit margin earned from business growth are likely to have bolstered the company’s overall bottom line in the third quarter.

Price Performance & Valuation

Intuitive Machines' shares have surged a massive 330.5% in the year-to-date period against the Zacks Aerospace-Defense industry’s decline of 3.9%. It has also outperformed the broader Zacks Aerospace sector’s growth of 4.3% and the S&P 500’s surge of 26.1% during the same period.

YTD Performance

Other defense players such as Leidos Holdings LDOS, TransDigm Group TDG and Lockheed Martin LMT have also delivered a stellar performance, with their shares surging 86.1%, 35.9% and 25.9%, respectively, year to date.

Regarding valuation, LUNR’s forward 12-month price-to-sales (P/S) is 4.63X, a premium to its peer group’s average of 2.90X. This suggests that investors will be paying a higher price than the company's expected sales growth compared to that of its peers.

LUNR’s Price/Sales Ratio (F12M)

Investment Thesis

With the market for space exploration exhibiting solid growth trends in recent times, backed by investments from both private companies and governments, stocks like LUNR are rallying high. Notably, in 2024, Intuitive Machines successfully landed its Nova-C class lunar lander, Odysseus, on the Moon, returning the United States to the lunar surface for the first time since 1972. Such achievements surely boost investors’ confidence in this stock, which must have been duly reflected in its impressive year-to-date share price performance.

However, the company is still in the preliminary stages of developing its full space infrastructure. If it fails to demonstrate the reliability of its products and services through a successful lunar landing or delays completing specific space missions, its results of operations might suffer.

Moreover, the company’s Return on Invested Capital (“ROIC”) was lower than that of its industry. This indicates that LUNR is not effectively earning profits from its invested capital compared to its industry.

LUNR Stock’s ROIC

Final Thoughts

Investors interested in LUNR stock should wait for a better entry point until next Thursday, considering its premium valuation and poor ROIC. However, those who already own it may continue to do so, considering its impressive year-to-date price performance and favorable Zacks Rank.

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