Intuitive Machines (LUNR): Valuation Spotlight After Air Force Backs Nuclear Power Tech for Space and Lunar Projects

Intuitive Machines (LUNR) just announced an $8.2 million contract extension from the U.S. Air Force Research Laboratory. This funding will support their efforts to develop nuclear power systems for spacecraft and lunar projects.

See our latest analysis for Intuitive Machines.

Intuitive Machines’ push into space-based nuclear power comes at a pivotal time, as the company’s share price has struggled heavily in 2024. The latest contract news has not offset steep weakness this year, demonstrated by a year-to-date share price return of -50.4%. However, the company’s one-year total shareholder return of just -1.4% hints at some resiliency despite volatility. With momentum still fading in the near term, investors are watching whether government-backed innovation can reignite interest.

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With the stock trading at a steep discount to analyst targets, but persistent losses keeping sentiment muted, the real question is whether today’s price offers genuine upside or if the market already anticipates any growth ahead.

Most Popular Narrative: 37.8% Undervalued

With the narrative’s fair value set at $15.43 versus a last close of $9.59, there is a considerable gap that has market watchers paying close attention to the assumptions behind this bullish outlook.

Ongoing expansion into high-margin, adjacent markets, including lunar surface mobility, in-space networking, reentry vehicles for biopharma and semiconductor transport, and potentially lunar nuclear power, creates new scalable, diversified earnings streams with multi-year and multi-billion-dollar revenue potential. This helps offset the lumpiness inherent in "success-based" mission awards.

Read the complete narrative.

Curious what bold forecasts make this fair value stand out? The narrative’s secret sauce is built on ambitious profit turnaround, rapid revenue acceleration, and a profit multiple rarely seen in space stocks. Think you know what drives the hype? See for yourself what supports this valuation—you might be surprised.

Result: Fair Value of $15.43 (UNDERVALUED)

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

However, execution delays and persistent losses remain key risks. These factors could dampen optimism and challenge the bullish growth expectations for Intuitive Machines.

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

Another View: Value Signals from Ratios

Taking a look at LUNR’s price-to-sales ratio, the stock trades at 5x, which is meaningfully higher than both the US Aerospace & Defense industry average of 3x and its peer group’s average of 2.2x. The fair ratio sits much lower at 1.8x. This wide disconnect means investors face significant valuation risk if sentiment slips or the company fails to deliver rapid growth. Will the market reward that premium, or is a correction waiting?

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

Build Your Own Intuitive Machines Narrative

If the current story doesn't fit your perspective or you'd rather dig into the numbers yourself, you'll find it easy to craft your own view in just a couple of minutes. Do it your way

A great starting point for your Intuitive Machines research is our analysis highlighting 2 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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