By Robert Francis, Australian Managing Director of global multi-asset investment platform eToro
Since Elon Musk has indicated that an IPO for his side project SpaceX, which designs, manufactures, and launches spacecraft, may be on the cards once its program Starlink can correctly predict cash flow, investors appetite for space travel stocks have multiplied rapidly in recent years.
The hype is well and truly present for SpaceX, as it recently launched and successfully landed its futuristic Starship, finally nailing a test flight of the rocketship that Musk intends to use to land astronauts on the moon and send people to Mars.
But what about other key players currently shaping this space? Should investors keep watch of space stocks and listed companies leading the odyssey to outer space, or could it suck them into a black hole?
The astronomical trillion-dollar space industry
Welcome to the trillion-dollar space-age, and while it looks a little less like The Jetsons or Star Wars, its just as impressive all the same.
The market cap of publicly traded space is already worth $25 billion, up from nothing a few years ago, and this figure doesnt even include the un-listed latest wave of companies specialising in space exploration and tourism, including SpaceX, Rocket Lab with its growing string of rocket launches, Jeff Bezos Blue Origin, Momentus and Planet with its constellation satellites taking photos of Earth from orbit.
When looking at the companies that are currently vying for attention from investors, there are a few hot contenders.
Virgin Galactic
Founded by billionaire Richard Branson, Virgin Galactic is the worlds first commercial spaceline and vertically integrated aerospace company.
In March 2021, Virgin Galactic revealed the first Spaceship III in its growing fleet, VSS Imagine. The spaceship showcases Virgin Galactics innovation in design and astronaut experience and is expected to commence ground testing, with glide flights planned in the US summer from Spaceport America in New Mexico.
The share price seems to have dropped quite significantly in May 2021, in part due to non-listed rival Blue Origin announcing it will begin running paid tourism flights to the edge of space and back on July 20, 2021.
The first flight is anticipated to only carry one paying passenger, with the ticket sold at auction and the proceeds donated to Blue Origins educational foundation. However, according to Reuters, Bezos said it will fly at least a few times more later this year, commercially, and presumably with full flights of passengers paying an estimated $200,000 or more per ticket.
Granted, Virgin Galactic has promised to resume flight testing this month and confirmed it will only need to get two more test flights done before its ready to fly passengers.
Blue Origins announcement means despite Virgin Galactic originally championing the idea of space tourism first, it might not be the first to implement it. In fact, analysts who follow the company believe Virgin Galactic might not begin commercial operations until next year.
Raytheon Technologies
Another company gaining momentum is aerospace and defense company Raytheon Technologies.
In May 2021, Raytheon Technologies released its Q1 earnings report, and it became abundantly clear that the recovery in the commercial aerospace market has been much slower than anticipated.
With two-thirds of Raytheon Technologies current revenue coming from its defense business, it seems that the market is significantly undervaluing its commercial aerospace businesses.
Space Exploration and Innovation ETF (ARKX)
However, investing in individual companies may feel alien to investors new to the space industry. Space ETFs are becoming popular for investors who see value in the industry as a collective, with names like ARK Invest, the investment firm led by Cathie Woods, which has seen over half of billion dollars flow into the Space Exploration and Innovation ETF (ARKX).
Launched on March 30 2021, ARKX is invested in purer space plays, as well as companies that will benefit from aerospace activities or technologies to support aerospace.
Some of the stocks included in the ETF include geolocation company Trimble, satellite stock Iridium Communications, Kratos Defense and Security Solutions, L3Harris Technologies, and JD.com. The ETF also owns shares of Netflix and Deere.
Risks involved with interstellar space stocks
As many of the leading companies in the space travel race are still relatively young, including Virgin Galactic, shares may continue to be volatile until business operations stabilise.
For investors looking to pre-invest in some of the biggest upcoming space travel IPOs and SPACs including SpaceX and Blue Origin that have ambitious plans to make space a viable destination, its likely that these stocks will also be extremely unstable due to a number of uncertainties in the market.
Another glaring issue is the risk factor associated with space exploration. As many of these companies are still in the testing phase, its likely that if a disaster occurs, such as a blown-up rocket or loss of life, stock value would likely plummet.
Some investors may also point to space stocks as another bubble in the broad market. Many companies are light years away from generating significant revenue. Profitability is even further out, perhaps not until the next decade.
With prices for many of the space stocks rearing on the exorbitant side, some investors may be deterred from investing in them, or until at least they start proving their worth.
Should investors invest in outer space?
For investors looking to enter the space race, buying into stocks like Virgin Galactic might be seen as a desirable option.
With SpaceX and Blue Origin building momentum and looking to publicly list in the not-too-distant future, investing early could be the answer for budding investors looking to make it big in outer space. Could a small step into space stocks become one big leap for your portfolio?
Nobody knows, so investors should consider approaching these investments as they would traditional stocks: taking care to diversify their portfolios, do their research, and only invest what they afford when buying into space travel stocks to minimise risks.
More:
- Startups have taken big strides this year to bring back space travel - Fortune - February 22nd, 2024 [February 22nd, 2024]
- Isolation and annoying co-workers: Solving the stress of a trip to Mars - Astronomy Magazine - February 22nd, 2024 [February 22nd, 2024]
- SPACE PERSPECTIVE UNVEILS THE FUTURE OF HUMAN SPACE TRAVEL - PR Newswire - February 22nd, 2024 [February 22nd, 2024]
- Space Perspective Unveils The Future Of Human Space Travel - Space Daily - February 22nd, 2024 [February 22nd, 2024]
- Brokaw: 'Constellation' is an unsettling story of space travel - Daily Herald - February 22nd, 2024 [February 22nd, 2024]
- The New Companies Developing Tech on the Space Coast - SpaceCoastDaily.com - February 22nd, 2024 [February 22nd, 2024]
- A space tourism milestone has been reached. Now, testing begins. - Travel Weekly - February 22nd, 2024 [February 22nd, 2024]
- Space Perspective Unveils Test Capsule, Marks Milestone in Titusville's Spaceflight Journey | TalkOfTitusville.com - Talk of Titusville - February 22nd, 2024 [February 22nd, 2024]
- Former West High student now heads tech startup making pharmaceuticals in space - Salt Lake Tribune - February 22nd, 2024 [February 22nd, 2024]
- Space travel: How does it feel to live and work on Mars? - Mint Lounge - February 22nd, 2024 [February 22nd, 2024]
- NASA's Vision for the Future: A New Space Station by 2030 - Medriva - February 22nd, 2024 [February 22nd, 2024]
- How antimatter engines could fly humans to other stars in just a few years - Business Insider Nederland - February 22nd, 2024 [February 22nd, 2024]
- Kam Ghaffarian's Moonshots - The New York Times - February 18th, 2024 [February 18th, 2024]
- Tiny robot's successful first surgery could have huge implications for space travel - ReadWrite - February 18th, 2024 [February 18th, 2024]
- Space Health Challenges and Innovations in Deep Space Travel - Medriva - February 18th, 2024 [February 18th, 2024]
- NASA is Done Setting Fires Inside its Doomed Cargo Spacecraft - Universe Today - February 18th, 2024 [February 18th, 2024]
- 'The Space Race' Review: Why Was NASA So White? - The New York Times - February 18th, 2024 [February 18th, 2024]
- The New Corporate Frontier: Implications of the Space Race on Ground-Based Telescopes and Astronomical Research - Medriva - February 18th, 2024 [February 18th, 2024]
- This Remotely Controlled Robot Will Conduct a Simulated Surgery on the International Space Station - Smithsonian Magazine - February 18th, 2024 [February 18th, 2024]
- Canadian Astronaut Jeremy Hansen: Reflecting on Canada's Role in Space Exploration and Preparing for Artemis II ... - Medriva - February 18th, 2024 [February 18th, 2024]
- Axiom Space's Ax-3 Mission: A Revolutionary Step in Commercial Space Travel - Medriva - January 23rd, 2024 [January 23rd, 2024]
- MBRSC to begin second Mars simulation mission on January 26 - SatelliteProME.com - January 23rd, 2024 [January 23rd, 2024]
- Starfield players outraged over missing space exploration feature - Dexerto - September 3rd, 2023 [September 3rd, 2023]
- This Alternate Method of Space Travel in Starfield is Way More Immersive Than Menus - GameRant - September 3rd, 2023 [September 3rd, 2023]
- Starfield: How to space travel and scan planets - App Trigger - September 3rd, 2023 [September 3rd, 2023]
- Why Do Almost Half of Moon Missions Fail? Here's Why Space Is ... - Inverse - September 3rd, 2023 [September 3rd, 2023]
- Researchers Discover Yet Another Way That Space Travel Kills You - The Debrief - September 3rd, 2023 [September 3rd, 2023]
- Moon landing rekindles interest in space exploration - New Zealand Herald - September 3rd, 2023 [September 3rd, 2023]
- What's it like to win a trip to space? - BBC - September 3rd, 2023 [September 3rd, 2023]
- UNLV Earns NASA Awards to Bolster Space-Related Research ... - UNLV NewsCenter - September 3rd, 2023 [September 3rd, 2023]
- 7 Best Ships To Unlock In Starfield - Screen Rant - September 3rd, 2023 [September 3rd, 2023]
- Starfield players agree that its first dozen hours are its weakest: 'OK ... - PC Gamer - September 3rd, 2023 [September 3rd, 2023]
- Buddhists Do Not Want Space Junk to Fall on Your Head - E-International Relations - September 3rd, 2023 [September 3rd, 2023]
- Will humans ever go to Mars? | Astronomy.com - Astronomy Magazine - September 3rd, 2023 [September 3rd, 2023]
- Unleashing Power of Tether Space Transport - Jammu Kashmir ... - Daily Excelsior - September 3rd, 2023 [September 3rd, 2023]
- Frustrated Starfield players say controversial low review scores are ... - Dexerto - September 3rd, 2023 [September 3rd, 2023]
- Saudi space mission to launch on May 21, first Arab woman astronaut to embark on historic journey to ISS - wknd. - May 18th, 2023 [May 18th, 2023]
- Saudi astronauts to launch space mission on May 21 - Saudi Gazette - May 18th, 2023 [May 18th, 2023]
- First Saudi space mission to launch on May 21 with Kingdoms first astronauts - Al Arabiya English - May 18th, 2023 [May 18th, 2023]
- Flying in space would slash Sydney to London journey time to just two hours - 9News - May 18th, 2023 [May 18th, 2023]
- Flights from Sydney to London take two hours with outer space ... - Innovation News Network - May 18th, 2023 [May 18th, 2023]
- The Final Frontier for the Faithful: Islamic Rulings on Space - E-International Relations - May 18th, 2023 [May 18th, 2023]
- Twitter is still vital for the space community. A former NASA astronaut ... - Space.com - May 18th, 2023 [May 18th, 2023]
- CNL Aims to Better Protect Canadian Astronauts Through New Project Funded by the Canadian Space Agency - Yahoo Finance - May 18th, 2023 [May 18th, 2023]
- SpaceX Announces Seat Reservations For Space Station Travel - Traveling Lifestyle - May 18th, 2023 [May 18th, 2023]
- Axiom-2 Mission Set to Launch with Diverse Crew of Private ... - Transcontinental Times - May 18th, 2023 [May 18th, 2023]
- New Mexico has surreal sand dunes, snowy mountains, space alien ... - Knoxville News Sentinel - May 18th, 2023 [May 18th, 2023]
- To Space and Back: Students Conduct Plant Science Research on ... - ISS National Lab - May 18th, 2023 [May 18th, 2023]
- NASA Tests Robot Snakes to Send to Other Planets - Newsweek - May 18th, 2023 [May 18th, 2023]
- HAL 9000 Is the Most Terrifying Movie A.I. - Collider - May 18th, 2023 [May 18th, 2023]
- Space Travel Market 2023 to 2029 Industry Analysis, Growth ... - Cottonwood Holladay Journal - May 18th, 2023 [May 18th, 2023]
- Virgin Galactic: Revolutionizing Space Travel and the Future of ... - Best Stocks - May 18th, 2023 [May 18th, 2023]
- Virgin Galactics first private space tourism flight to take off in June - Travel Tomorrow - May 18th, 2023 [May 18th, 2023]
- NASA PC-12 to conduct aerial flights over Cleveland roadways - AviationSource News - May 18th, 2023 [May 18th, 2023]
- Florida's 'Space Coast' Has Incredible Beaches, Food, and Dolphins Here's How to Plan a Trip - Yahoo Life - May 18th, 2023 [May 18th, 2023]
- Fast X adds Jason Momoa to the Vin Diesel-driven franchise for the first instalment of a series finale that already feels like its spinning its wheels... - May 18th, 2023 [May 18th, 2023]
- Airstreams new travel trailer fits a swanky studio apartment into less than 17 feet of living space - The Manual - May 18th, 2023 [May 18th, 2023]
- Steven Wright, Master of the One-Liner, Tries His Hand at a Novel - The New York Times - May 18th, 2023 [May 18th, 2023]
- Poop falling from the sky: Here's how often that happens - CBS News - May 18th, 2023 [May 18th, 2023]
- How will we react when the aliens arrive? - The Irish Times - May 18th, 2023 [May 18th, 2023]
- Luxury stores with the most beautiful interiors - Luxebook - May 18th, 2023 [May 18th, 2023]
- Is it really possible to travel back in time? - BBC Sky at Night Magazine - May 18th, 2023 [May 18th, 2023]
- The pros and cons of space colonization - Yahoo News - May 10th, 2023 [May 10th, 2023]
- In space, failure is an option often the only one - Nature.com - May 10th, 2023 [May 10th, 2023]
- Virgin Galactic Announces Return to Space, Crew | - Santa Fe Reporter - May 10th, 2023 [May 10th, 2023]
- A tour inside the Thailand's first space themed hotel - Manila Bulletin - May 10th, 2023 [May 10th, 2023]
- Buzz Aldrin named Brigadier General by Space Force - We Are The Mighty - May 10th, 2023 [May 10th, 2023]
- Virgin Orbit Failure Casts Cloud Over Space Voyages - Kiplinger's Personal Finance - May 10th, 2023 [May 10th, 2023]
- OPINION: A Return to Profitability for Commercial Aviation - Avionics ... - Aviation Today - May 10th, 2023 [May 10th, 2023]
- 12 Realistic Films About Space Travel and Making Contact With Aliens - Wealth Of Geeks - May 10th, 2023 [May 10th, 2023]
- Dont be fooled: 10 of the biggest travel myths, busted - Sydney Morning Herald - May 10th, 2023 [May 10th, 2023]
- 20 of the Worst Disasters in Space Flight History - 24/7 Wall St. - May 10th, 2023 [May 10th, 2023]
- This Day in History: Astronaut Alan Shepard became the first American in space - WESH 2 Orlando - May 10th, 2023 [May 10th, 2023]
- 10 Wildest Science Fiction Movies That Could Actually Happen - Screen Rant - May 10th, 2023 [May 10th, 2023]
- Harry Styles new road trip music video Satellite is full of US travel ... - New Zealand Herald - May 10th, 2023 [May 10th, 2023]
- What is the future of space travel? | Royal Museums Greenwich - Cutty Sark - March 31st, 2023 [March 31st, 2023]
- Timeline: 50 Years of Spaceflight | Space - January 6th, 2023 [January 6th, 2023]
- Scientists Propose New, Faster Method of Interstellar Space Travel - January 6th, 2023 [January 6th, 2023]
- Home | Virgin Galactic - December 28th, 2022 [December 28th, 2022]
- Space Program | JFK Library - December 14th, 2022 [December 14th, 2022]