A Look at Intuitive Machines (LUNR) Valuation After $300 Million Convertible Note Offering

Intuitive Machines (LUNR) has been making headlines with back-to-back announcements of substantial fixed-income offerings. The company first planned a $250 million convertible senior note and then swiftly completed a $300 million version of the deal. Moves like this get investors talking, as raising so much capital, especially through convertible bonds, can signal both confidence in future opportunities and a desire to shore up finances for growth or resilience. The question on everyone’s mind is what this influx of capital really means for the company’s long-term strategy and for those holding (or considering) LUNR shares.

The market reaction has been tangible. After a year of zig-zagging trading, Intuitive Machines shares have soared 71% over the past year but faced selling pressure in recent months, dropping nearly 30% in the past month alone. This follows a volatile stretch that included both growing revenue and dramatic swings in net income, reflecting the company’s appetite for capital and its big ambitions in the space sector. That kind of performance raises the stakes for how investors view risk and reward in this context, and whether today’s price still lines up with the company’s trajectory.

So, after this surge and pullback, is Intuitive Machines trading at an attractive entry point, or is the market already factoring in all the future growth those new funds might unlock?

Most Popular Narrative: 39.6% Undervalued

According to community narrative, Intuitive Machines is seen as significantly undervalued. Analysts calculate a fair value much higher than the current share price, based on forward-looking assumptions about growth and profitability.

The accelerating commercial use of space, both by public space agencies and private enterprises, is expanding the total addressable market for lunar transport, data transmission, and infrastructure services. Intuitive Machines' sole-source NASA Near Space Network contract, ongoing expansion into Mars relay and data services, and a robust pipeline for defense-related lunar missions position the company for substantial revenue growth as global demand for lunar and deep space access increases in the coming decade.

Want to know the logic behind this bullish valuation? The narrative builds its case on aggressive growth expectations, sector dominance, and improved profitability. Curious about the precise financial leap analysts are forecasting for Intuitive Machines? Discover which future milestones could drive significant upside and justify this notable price target.

Result: Fair Value of $14.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy dependence on government contracts and persistent operating losses could quickly undermine these bullish projections if execution falters or if awards are delayed.

Find out about the key risks to this Intuitive Machines narrative.

Another View: Discounted Cash Flow Tells a Different Story

Looking at Intuitive Machines through the lens of our DCF model changes the outlook entirely. This approach suggests the company is trading well below what its future cash flows imply, offering a deeper value angle. Could the market be missing potential this model highlights?

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 Intuitive Machines 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 Intuitive Machines Narrative

If you have a different perspective or want to dig into the numbers yourself, you can quickly craft your own take on the story, your way. Just do it your way.

A great starting point for your Intuitive Machines research is our analysis highlighting 2 key rewards and 2 important warning signs 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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