Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

While Intuitive Machines (NASDAQ: LUNR) and Rocket Lab USA (NASDAQ: RKLB) took the space stock spotlight, the industry is a rapidly evolving one. These companies specialize in satellite deployments, the cornerstone of the space sector.

Although they make for relatively safe space stock exposures, there is one exception to consider due to its enormous penny stock potential.

Planet Labs PBC (NYSE: PL)

After merging with a special purpose acquisition company (SPAC) worth around $2.8 billion, dMY Technology Group, Inc. IV (NYSE: DMYQ) at the end of 2021, PL stock is still far away from its all-time high of $11.84 at that time. 

However, currently priced at $4.46, PL stock doubled its value from the 52-week average of $2.23 per share. Founded in 2010 and backed by Google, Planet specialized in detailed imaging of Earth’s surface. To that end, the company designed, built and operates the largest 200-strong satellite constellation to date, delivering around 25 TB of data per day.

This data is then packaged for sale via subscription over 1,000 global clients, both commercial and governmental. 

In August, Planet launched its first hyperspectral satellite, Tanager-1. Additionally, the company continues to build the Dove constellation for high-res Earth observation. 36 new SuperDove satellites (Flock 4BE) launched on November 11th, on top of 120 between 2019 to 2022. 

Although this boosts the bottom line of SpaceX, with Planet utilizing Falcon 9 rockets, the company is making important steps to enter the profitability zone while still having zero debt. In Q2 ending September 5th, Planet reported relatively the same net loss of $38.7 million vs $38 million in the year-ago quarter. 

However, Planet’s revenue picked up 14% YoY, with more government contracts. Notably, the company expanded into the military domain with NATO’s introductory contract to fill data observation gaps. With no debt and ample $249 million in cash reserves, it is safe to say that Planet Labs has a long runway before it reaches a sustainable cash flow model.

But the trick is to enter Planet Labs exposure before that period, for a long-term space stock play.

Planet Labs’ next earnings report is scheduled for December 9th, with estimated earnings per share (EPS) forecast of negative $0.1 vs reported negative $0.13 year-ago. According to 11 analyst inputs, PL’s current price of $4.46 is above the median price target of $4 per share. The low estimate is $2.5 while the top twelve months ahead is $5 per share. 

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AST SpaceMobile (NASDAQ: ASTS)

Due to terrain difficulty, there will always be demand for cellular service that doesn’t rely on ground towers but on satellites. AST partners with major mobile network operators (MNOs) like Verizon and AT&T to bridge the gap, receiving a 50/50 revenue split in return.

At the end of October, AST announced the deployment of Block 2 satellite constellation aimed for 5G service with up to 120 Mbps data transfers. This is 10x higher than the previous Block1 generation. These solar-powered satellites, dubbed BlueBirds and weighing 1,500kg, are one of the largest commercially deployed satellites.

This also means that AST competes directly with SpaceX and Lynk Global, as a direct-to-device space service provider. Based in Texas, AST would need up to 60 BlueBirds for total US coverage. 17 Block 2 BlueBirds are currently in production.

Investors looking into ASTS exposure should also consider Cadence Design Systems (NASDAQ: CDNS). This is the company behind AST’s next gen BlueBirds, enabling their 10x greater data transfer performance. 

Year-to-date, ASTS stock is up 374% while CDNS is up 18%. As of October’s Investor Presentation, AST received $1.5 billion in funding to build its LTE & 5G space-based cellular broadband infrastructure. Across agreements with 45 MNOs, this covers around 2.8 billion subscribers.

Long-term, AST counts on expansion into the $1.1 trillion total addressable market (TAM) for global mobile wireless services. Only ~10% of Earth’s physical surface (vs population) currently has cellular coverage while 42% of the global population is yet to be connected.

This potential explains the rapid ASTS stock valuation, as the only pure play (publicly traded) LEO broadband company. As of November’s Q3 earnings, AST increased its quarterly cash position (liquidity) from $287.6 million to $518.9 million, against $94 million in total current liabilities.

Presently priced at $22.90, the median ASTS price target is $37.85 per share. Per three analyst inputs (Deutsche Bank, Barclays, B.Riley), the bottom outlook is $31, while the top is $44.7 per share. 

Momentus (NASDAQ: MNTS)

For investors looking for the cheapest penny space stock exposure, Momentus caters to the satellite bus market. These are the structural platforms that hold satellite payloads. Californian Momentus has a proven track record with its Vigoride platform, having deployed 18 satellites in total.

Global satellite bus market is projected to double from $13.6 billion in 2023 to $25 billion by 2032, according to Global Market Insights (GMI). Although NASA picked Momentus for launch services under its VADR (Venture-Class Acquisition of Dedicated and Rideshare) contract in October, the company received NASDAQ non-compliance notice in August for failure to report quarterly financial reports.

In September, Momentus secured a $2.75 million deal to sell 5 million MNTS shares at $0.55 per share. Such dilution ended with a 66% MNTS stock drop year-to-date. Moreover, the use of funds for debt repayment and working capital speaks more to financial stress than expansion.

However, if Momentus secures more capital, which could be the case for such a small company, alongside its proven track record, MNTS could see significant gains. It is also worthy of note that Momentus received a contract from Space Development Agency (SDA) in November for the Hybrid Acquisition for Proliferated LEO (HALO) program.

As such, MNTS stock is a highly risky penny stock, but with great profit potential. At present, MNTS shares are priced at $0.56 vs the 52-week average of $0.72 per share. The all-time high MNTS price was in February 2021, at astronomical $1,371 per share, reminiscent of memecoins at their peak hype.

Do you think SpaceX’s Starlink will go public in 2025? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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