Space stocks are helping us live in a more connected world via satellite technology. These companies are helping to close gaps for remote regions. Oftentimes, internet access is uncovered or impossible, such as at sea or in very remote areas. Also, space stocks are pioneering secure communications for government agencies and large corporations with robust privacy and security needs.
These space stocks are changing the industry in various ways. Through their mix of satellite constellations and technologies, they push our existing boundary infrastructure. Each has unique reasons for investors to consider and add them to their watchlist.
So, if you’d like to add some potentially undervalued space stocks to your portfolio, consider these companies.
ViaSat (VSAT)
ViaSat (NASDAQ:VSAT) provides high-speed satellite broadband services and secure networking systems covering military and commercial markets.
Buying VSAT is based the expectation to bounce back strongly from the failure of its VS-3 satellite project. It has plans to launch new satellites in 2024, which could significantly boost its share price.
So, because of this, VSAT could be undervalued. Inherently, it’s a bump in the road instead of a long-term failure of the business.
Another bullish factor is that it inked numerous deals with other businesses last month. This includes extending its partnership with Porter Airlines as well as the space agencies of the U.K. and Japan.
Wall Street’s consensus now is that it’s a buy. Thus, I believe its share price can recover after being down 20.16% over the past year.
Gilat Satellite Networks (GILT)
Gilat Satellite Networks (NASDAQ:GILT) is an Israeli-based company providing satellite broadband communications.
There’s a strong argument to make that GILT is a great investment and potentially undervalued.
Notably, GILT demonstrated solid top-line growth across various business segments in Q1 FY2023. Also, it showed an impressive gross margin increase to 42% (998 basis points higher than last year). And, its adjusted EBITDA experienced a significant surge, reaching over $8.4 million, a threefold increase from Q1 FY2022.
Additionally, GILT’s main focus end-market is projected to grow from $7.48 billion in 2023 to $21.03 billion by 2030, at a CAGR of 15.9%.
Also, GILT is cheap on a price-to-sales basis, trading at just 1.36 times sales and 25.2 times earnings. Wall Street rates GILT a strong buy, with an average consensus upside of 34.92%, from its former $6.30.
Iridium Communications (IRDM)
Iridium Communications (NASDAQ:IRDM) operates the Iridium satellite constellation. The company provides voice and data coverage to satellite phones, pagers, and other devices globally.
In fact, IRDM is my contrarian pick of this bunch. Therefore, it should only be considered by investors with a high-risk tolerance. My reasoning? Its stock price is down by over 21% over the past year amid operational and financial difficulties.
Still, some of the best opportunities present themselves when everyone else has written them off as too risky to consider.
The company’s shares dropped amid an agreement terminated by a subsidiary of Qualcomm (NASDAQ:QCOM). The agreement previously allowed IRDM to leverage satellite messaging and emergency services in cell phones.
Still, the company expects to grow its revenue to $1 billion by 2030. Also, they plan to increase the number of subscribers to its platform by 1.97 million to 2.24 million. So, by 2030, IRDM aims for a total revenue of $1.35 billion and EBITDA of $865.9 million. And this means its shares could be significantly undervalued from their current price points.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
