While it doesn’t get nearly as much attention as artificial intelligence (A.I.), space is a fast-growing segment of the economy and technology sector. Investing in space stocks can give investors access to cutting-edge innovations and big growth potential.
According to a report by consulting firm McKinsey & Co., the space market has grown to $447 billion today, up from $280 billion in 2010. That same market could reach $1 trillion by 2030. Governments have been increasingly distributing capital to private companies in space exploration and advancements.
The National Aeronautics and Space Administration (NASA) is no longer the only game in town. In fact, NASA increasingly relies on private sector space companies, many of which are small start-ups, to help it accomplish its missions. Tasks range from transporting supplies to the International Space Station to launching communication satellites into orbit.
It’s a growing field with many new companies entering. This presents a huge opportunity for investors who know how to spot the right space companies to invest in. Here are three of the best space stocks to buy now.
Planet Labs (PL)
Planet Labs (NYSE:PL) is an Earth-imaging company that uses its own satellites to image the entire Earth each day. The data collected is used to monitor changes on our planet, identify trends, and anticipate problems.
The technology can be used for everything from helping farmers improve their crop yields to tracking the Russian military’s movements in Ukraine. Given all the potential uses of its satellites and imaging, there are analysts who remain bullish on Planet Labs and its future.
Unfortunately, the bullish long-term outlook is not reflected in the current price of PL stock. Since going public in 2021 via a special purpose acquisition company (SPAC) deal, Planet Labs’ share price has been crushed, falling 66%.
This year, the stock is down 26%. At a little above $3.30 a share, the company has become a penny stock. The problem is that Planet Labs remains in start-up mode and is unprofitable. In its latest quarter, the company reported a net loss of $34.4 million or 13 cents a share. The company also lowered its forward guidance.
PL stock currently trades near its 52-week low. It’s still a young company with great potential.
Rocket Labs (RKLB)
For a space stock that’s on an upswing right now, check out Rocket Labs (NASDAQ:RKLB). The company makes rockets that are used to launch satellites into space. Rocket Labs is focusing on developing larger and reusable rockets that can be employed multiple times to launch bigger satellites and carry larger payloads into outer space.
With more than 30 successful launches now under its belt, Rocket Labs’ stock has been on a tear this year, rising by over 90% since January and matching the gains in many mega-cap tech stocks.
Even with this year’s big run, RKLB stock is currently trading 7% below its 52-week high. Shares are also trading 60% lower than the all-time high. With its business growing and new technologies on deck, RKLB stock can continue rising.
Rocket Labs is currently unprofitable, with a net loss in this year’s first quarter of $45.62 million. However, the company doubled its order backlog to $503.6 million heading into this year. Rising demand can help the company report a profitable quarter in the future.
Iridium Communications (IRDM)
For a more mature space company that boasts a stable growth stock, there is Iridium Communications (NASDAQ:IRDM). Founded in 2001, the company operates the Iridium satellite constellation, a system of 75 satellites that encircle the globe in outer space and facilitate worldwide voice and data communications via satellite phones.
The company enables satellite messaging services on Android smartphones, and its technology is used by the U.S. Department of Defense for various operations around the world.
IRDM stock trades as a mature security and its gains are both consistent and impressive. The stock is up 15% this year, has gained over 50% in the last 12 months, increased by over 230% over five years, and has risen by over 550% since going public in 2008.
By any measure, IRDM stock has been a good investment. Unlike most space stocks, many of which are start-up companies, Iridium Communications pays its shareholders a quarterly dividend of 13 cents per share. That comes to a yield of 0.85%. IRDM is one of the top space stocks to buy.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
