Key Points

• Bank of America cut its price target on Intuitive Machines stock yesterday -- and the stock rose anyway.

• Intuitive is gaining again today, but BofA's warnings yesterday still merit attention.

• Free cash flow at the space company will be lumpy, and could remain so for years.

• 10 stocks we like better than Intuitive Machines ›

Something curious is happening with Intuitive Machines (NASDAQ: LUNR) stock, the tiny lunar exploration company that last year landed a U.S. spacecraft on the moon for the first time in over 50 years.

Yesterday, Bank of America analyst Ronald Epstein lowered his price target on Intuitive stock from $16 to $10.50, below where the stock was trading, triggering an "underperform" rating. And yet, Intuitive Machines stock went up, not down, on the news (rising 1.2%).

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And today, it's going up even more.

Image source: Getty Images.

What BofA says about Intuitive Machines stock

Intuitive Machines stock gained a healthy 5.1% through 10:40 a.m. ET. But while investors are surely happy to see Intuitive continue to defy gravity, maybe they shouldn't get used to it.

As Epstein explains, in a note covered by The Fly, Intuitive stock has done well this year after surprising investors with a report of positive free cash flow achieved in Q1 -- $13.3 million generated in the quarter. At the same time, however, management warned that cash receipt lumpiness could return in Q2.

And I suspect "cash receipt lumpiness" translates as "negative free cash flow."

Is Intuitive Machines stock a buy?

This shouldn't be a surprise.

Analysts have long forecast it would take Intuitive until at least 2027 to reach sustained profitability as calculated according to generally accepted accounting principles (GAAP), and 2028 to begin generating consistently positive FCF. Q2 2025 was almost certainly an aberration, albeit a happy one, and investors will still need patience with this stock.

That said, I believe patience will be rewarded. Between the company's series of NASA contracts to land spacecraft on the moon, its Near Space Network communications contract, and now a new business building Earth reentry vehicles for semiconductor and space pharmaceutical customers, Intuitive's future could be out of this world.

Should you invest $1,000 in Intuitive Machines right now?

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Bank of America is an advertising partner of Motley Fool Money. Rich Smith has positions in Intuitive Machines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Sometimes, bad news for a stock investor can be good news for a stock buyer. Take the case of Intuitive Machines (NASDAQ: LUNR).

One month ago, I asked myself if Intuitive Machines -- a stock I already own -- might be worth buying even more of, after its share price nearly doubled from the price at which I first bought it. Paying twice the price for the very same stock ordinarily wouldn't sound like much of a bargain. In fact, after running the valuation on the stock in May, I ended up hedging my bet and arguing it might be worth buying. Yet it also seemed to cost more than I usually consider an acceptable valuation for an unprofitable space stock.

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But that was then, and this is now. Over the past month, shares of Intuitive Machines have slumped 14%, closing Friday below $11 a share. For existing shareholders, that's disappointing. For investors looking to buy into Intuitive Machines for the first time, however, it may be an opportunity.

Image source: Getty Images.

Introducing Intuitive Machines

In case you're unfamiliar with the company, Intuitive Machines is the very definition of a space stock. The company is best known for being the first private company to land a spacecraft on the moon, and for landing an American spacecraft on the moon for the first time since the Apollo era 50 years ago.

It has in fact landed spacecraft on the moon twice now. Granted, neither landing was 100% successful -- both vehicles toppled over on their sides after landing -- but they did touch down safe and intact before keeling over. The company has secured NASA contracts for two more landing attempts, scheduled to take place in 2026 and 2027. And Intuitive Machines has promised to "incorporate ... lessons learned" from the first two partially successful landings to try and improve its performance on the next two.

According to filings with the Securities and Exchange Commission (SEC), the company was paid $132 million for its first landing and $122 million for the second (with both NASA and various commercial customers contributing to the revenue). Intuitive Machines' third mission, IM-3, is said to be priced at $87 million, but that number may be increased, and doesn't yet include payments from commercial customers.

As valuable as these moon landing contracts are, however, they're arguably dwarfed by a completely different kind of contract Intuitive Machines secured from NASA last year. For $4.8 billion, spread across 10 years (so $480 million per year -- quadruple the value of a lander contract), the company has been hired to build a Near Space Network of satellites that will relay communications from low earth orbit to the moon and back.

How to value Intuitive Machines stock

Over the past few years, both stock markets and corporate mergers and acquisitions (M&As) have been valuing (mostly unprofitable) space stocks in a range of 2 to 4 times annual revenue.

Intuitive Machines did $217 million in revenue last year, implying the stock should cost less than $880 million today. And yet it currently costs closer to $1.3 billion; factoring in "shares held by non-controlling interest holders," S&P Global Market Intelligence data suggests the company's implied market capitalization might be as high as $2 billion. So is that too much to pay?

I think not.

Why not? Well, just consider a future in which Intuitive Machines keeps launching one moon lander per year for NASA and its private customers (say, $120 million in revenue), operates its Near Space Network (for another $480 million), and does nothing else at all. Imagine it doesn't provide communications services to private customers with payloads on the moon, launch more often than once per year, or explore any new business opportunities in space.

That's still $600 million a year in revenue, and at a revenue valuation (price-to-sales ratio) of 4, it implies that Intuitive Machines stock should be worth $2.4 billion -- and that's assuming the company does all of this unprofitably. (The price-to-sales ratio of 2 to 4 only applies to unprofitable space companies, remember.) Yet analysts polled by S&P Global anticipate that Intuitive Machines actually will begin reporting profits based on generally accepted accounting principles (GAAP) just two years from now, in 2027.

Even taking the most extreme estimate of the stock's current valuation today, $2 billion, that means the stock is probably already undervalued -- and a buy.

Should you invest $1,000 in Intuitive Machines right now?

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Rich Smith has positions in Intuitive Machines. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.

Shares of Intuitive Machines (NASDAQ: LUNR) are trading higher this week. The company's stock had gained 9.6% as of 1:14 p.m. ET on Friday. The jump comes as the S&P 500 and Nasdaq Composite both had one of their most chaotic weeks in years.

The lunar exploration company announced a deal this week with SpaceX to launch its fourth lunar mission.

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A SpaceX partnership

Investors were pleased to hear the company chose SpaceX's Falcon 9 rocket as the launch system that will carry its fourth lunar delivery mission (IM-4). The rocket will be launched from Florida and carry data relay satellites crucial to NASA's Near Space Network Services contract.

"Lunar surface delivery and data relay satellites are central to our strategy to commercialize the Moon," said Intuitive Machines CEO Steve Altemus in the announcement. The shift to a payload of communication infrastructure shows that the company is evolving beyond one-off lunar landings toward establishing permanent lunar services. The network will operate on a "pay by the minute" model, creating a recurring revenue stream.

Two additional missions will complete the satellite network that will support both NASA's lunar ambitions and commercial operations.

Recent challenges

Intuitive's most recent lunar mission wasn't a success. The company's lander touched down off course and tipped over, draining its batteries prematurely. Despite these setbacks, NASA has maintained confidence in the company, and the announcement today shows Intuitive knows the smart move is to diversify its mission capabilities.

Intuitive Machines still carries a great deal of risk given the uncertainties surrounding its execution and the viability of its business model, but the company continues to demonstrate significant potential. It's an intriguing option for investors with higher risk tolerance.

Should you invest $1,000 in Intuitive Machines right now?

Before you buy stock in Intuitive Machines, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Intuitive Machines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

It's been just over a year since Intuitive Machines (NASDAQ: LUNR) made history as the first private company to achieve a successful lunar landing. The mission marked a milestone in commercial space exploration, but more importantly, it solidified the company's position as a leader in the burgeoning industry with proven technical capabilities.

Despite a strong growth outlook fueled by several high-profile contracts, shares of Intuitive Machines have cratered at the start of 2025, trading down 60% year to date at the time of this writing amid the broader stock market sell-off.

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With the stock now trading below $8, is it a buy? Here's what you need to know.

A leader in space exploration

Intuitive Machines does not launch rockets itself but instead designs, builds, and operates spacecraft, such as its lunar landers. For its groundbreaking February 2024 IM-1 mission, the company's Odysseus Nova-C lander rode a SpaceX Falcon 9 rocket -- an approach that allows it to concentrate on its core strengths in payload delivery, lunar surface infrastructure, mobility and robotics, satellite operations, and data communications services.

The company aims to advance its technology steadily, eyeing a space infrastructure market opportunity that experts project will grow to $1.8 trillion by 2035. The early financial results have been impressive. In 2024 (covering the full year ended Dec. 31) Intuitive Machines' total revenue reached $228 million, nearly triple the 2023 result amid multiple contract awards and a close partnership with NASA, ending the year with a $328 million backlog.

Image source: Getty Images.

Projects fueling Intuitive Machines' growth include the Commercial Lunar Payload Services program, which builds on IM-1's success with IM-2's South Pole landing earlier this year to prospect for water. Two more lunar missions are slated through 2027. There is also the ongoing Omnibus Multidiscipline Engineering Services contract that further supports NASA with broad operational expertise.

For 2025, the company projects revenue of $250 million to $300 million, a solid 20% annual increase. While Intuitive Machines is not yet profitable, management's guidance suggests a positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) run rate by the end of the year, and for 2026, an encouraging sign of more sustainable fundamentals. This is backed by a robust balance sheet, with $385 million in cash and zero debt as of March 13, ensuring ample liquidity to drive its ambitions.

Catalysts on the horizon

One of the attractions of Intuitive Machines as an investment is that, despite uncertainties over the U.S. economy's strength and the looming impact of Trump administration trade tariffs, its business profile and operating tailwinds remain largely insulated from these dynamics. Its multiyear NASA contracts, funded at the federal level, ensure project continuity regardless of how consumer spending or GDP evolves, providing valuable stability in the early stages of a fast-evolving space exploration industry. While a severe economic downturn could pressure NASA to reassess future projects or limit private sector opportunities, it's business as usual for now.

Looking ahead, key catalysts could reignite investor enthusiasm and boost Intuitive Machines' battered stock price. The IM-3 mission, set for early 2026, will launch the first of five data relay satellites under the NASA Near Space Network contract, marking its entry into lucrative high-bandwidth transmission solutions as part of its space infrastructure-as-a-service offerings.

Later in 2025, NASA's decision on the $4.6 billion Lunar Terrain Vehicle Services contract, spanning 15 years through 2040, could be a game-changer for Intuitive Machines, one of three finalists. Additional private sector engagements and deployment announcements would likely further bolster its growth trajectory to lift investor sentiment.

Decision time: Buy the dip

I'm bullish on Intuitive Machines and see the recent stock price weakness as a chance for investors to buy the dip before a potential rebound. With the stock trading approximately 5 times its estimated 2025 revenue, the forward price-to-sales (P/S) ratio highlights compelling value for an industry pioneer with substantial long-term potential. The rally from here may not shoot straight into orbit, but the company has the pieces in place to reward shareholders over the long run. A small position in the stock, built through dollar-cost averaging to manage near-term volatility, could work well within a diversified portfolio.

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Dan Victor has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.