Firefly Aerospace (FLY): Evaluating Valuation After Alpha Flight 7 Explosion and Heightened Investor Scrutiny

Firefly Aerospace (FLY) saw its stock drop sharply after the first stage of its Alpha Flight 7 rocket exploded during a preflight test in late September. The timing, coming just weeks ahead of a planned launch, has deepened investor uncertainty around Firefly’s commercial reliability and future schedule.

See our latest analysis for Firefly Aerospace.

Firefly Aerospace’s volatile ride since its August IPO has only accelerated with recent events. While the company wowed markets out of the gate, surging more than 50% on debut, enthusiasm cooled rapidly as rocket test failures and weak second-quarter results sent the share price spiraling over 35% below its initial offering. With a 30-day share price return still in the red at -0.39%, momentum has clearly faded and the risk focus is back, especially as further operational setbacks keep investors cautious about near-term recovery.

If Firefly’s ups and downs have you looking for what’s next in space and defense, it might be the perfect moment to explore See the full list for free.

With Firefly stock now trading well below its IPO price and facing a string of setbacks, the key question for investors is clear: has all of the company’s risk and rebound potential been fully priced in, or is this latest dip a genuine buying opportunity?

Price-to-Sales of 38.2x: Is it justified?

With Firefly Aerospace trading at a lofty price-to-sales ratio of 38.2x, and a last close price of $26.8, the stock looks expensive compared to its US Aerospace & Defense industry peers.

The price-to-sales ratio compares the company’s market value to its annual revenue, providing a snapshot of how much investors are willing to pay for every dollar of sales generated. In sectors like aerospace, this metric is significant since many firms are not yet profitable or are investing heavily for future growth, making earnings less relevant.

Firefly’s multiple is more than ten times the industry average of 3.4x, underscoring significant optimism built into the share price. Peer comparisons are even more stark, with the average peer multiple at 2.7x. These figures suggest that the market is pricing in extraordinary future growth or other catalysts that industry rivals may not possess.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Sales of 38.2x (OVERVALUED)

However, persistent losses and operational missteps could limit Firefly's upside, especially if revenue growth fails to match lofty market expectations.

Find out about the key risks to this Firefly Aerospace narrative.

Another View: Our DCF Model Says Firefly Might Be Undervalued

While Firefly’s price-to-sales multiple looks sky-high, our DCF model suggests a different story. It estimates fair value at $36.92, about 27% above the current share price. This implies that the market may be underestimating Firefly’s long-term cash flow potential. Does this mean the risk is already factored in, or is the price still not low enough?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Firefly Aerospace for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Firefly Aerospace Narrative

If you have a different perspective or want to dig into the numbers yourself, you can easily craft your own narrative in just a few minutes. Do it your way

A great starting point for your Firefly Aerospace research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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