Should You Buy, Hold or Sell LUNR Stock Before Q4 Earnings Release?

Intuitive Machines, Inc. LUNR is slated to report fourth-quarter 2024 results on March 24, before market open.     See the Zacks Earnings Calendar to stay ahead of market-making news. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $56.6 million, implying 85.2% growth from the year-ago quarter's reported figure. The consensus mark for fourth-quarter bottom line is pegged at a loss of 8 cents per share, suggesting an improvement from a loss of 11 cents reported in the prior-year quarter. The bottom-line estimate has remained unchanged in the past 60 days.Image Source: Zacks Investment ResearchLUNR boasts a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three out of the last four consecutive quarters, and missed in one. The stock’s average earnings surprise is 34.50%.Image Source: Zacks Investment ResearchEarnings Whisper for LUNR StockOur proven model predicts an earnings beat for LUNR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.LUNR has a Zacks Rank #3 and an Earnings ESP of +9.11% at present. You can see the complete list of today’s Zacks #1 Rank stocks here.LUNR’s Q4 Results: Key Factors to ConsiderIn the soon-to-be-reported quarter, solid revenue generation from providing lunar payload services for NASA and other commercial payload contracts associated with the IM-1, IM-2, and IM-3 lunar payload missions are expected to have boosted Intuitive Machines' top-line performance. Also, revenue generation from the OMES III contract, in which LUNR provides engineering services to the Landsat Servicing mission at the Goddard Space Flight Center in Maryland, might have bolstered its revenue growth in the fourth quarter. Further, revenue generation, expected to have started from CP-22 and NSNS awards in the October-December quarter, is likely to have aided LUNR’s total revenues. However, ramp down of the OSAM mission within the OMES contract might have had some adverse impact on the company’s overall top-line performance in the fourth quarter. On the cost front, higher selling, general and administrative expenses due to an increase in public company costs, employee compensation benefits and rent on the company’s new corporate headquarters might have had some negative impact on its earnings performance. Nevertheless, solid revenue expectations and profit margin earned from business growth are likely to have bolstered the company’s bottom line in the fourth quarter.In December 2024, LUNR announced that it has secured additional contracts from NASA’s Near Space Network (“NSN”) for Direct-to-Earth (“DTE”) services. These contracts must have pushed up the company’s order book for the fourth quarter and thereby its backlog count, which should get duly reflected in its upcoming results.  Price Performance & ValuationIntuitive Machines' shares have surged a solid 16.6% in the past year against the Zacks Aerospace-Defense industry’s decline of 5.8%. It has also outperformed the broader Zacks Aerospace sector’s growth of 1.9% and the S&P 500’s surge of 7.6% during the same period.Image Source: Zacks Investment ResearchOther defense players such as Leidos Holdings LDOS, TransDigm Group TDG and Lockheed Martin LMT delivered a stellar performance on the bourses. LDOS, TDG and LMT shares have risen 11.3%, 7.3% and 6.2%, respectively, over the past year.Regarding valuation, LUNR’s forward 12-month price-to-sales (P/S) is 3.17X, a premium to its peer group’s average of 2.32X. This suggests that investors will be paying a higher price than the company's expected sales growth compared to that of its peers.LUNR’s Price/Sales Ratio (F12M)Image Source: Zacks Investment ResearchInvestment ThesisWith the market for space exploration exhibiting solid growth trends in recent times, backed by investments from both private companies and governments, stocks like LUNR are rallying. Notably, in 2024, Intuitive Machines successfully landed its Nova-C class lunar lander, Odysseus, on the Moon, marking the United States' return to the lunar surface for the first time since 1972. Such achievements surely boost investors’ confidence in the stock, as evident from its impressive share price performance over the past year. However, the company is still in the preliminary stages of developing its full space infrastructure. If it fails to demonstrate the reliability of its products and services through a successful lunar landing or delays completing specific space missions, its results of operations might suffer.Moreover, the company’s Return on Invested Capital (“ROIC”) was lower than that of its industry. This indicates that LUNR is not effectively earning profits from its invested capital compared to its industry. Its negative ROIC is a cause for concern. LUNR Stock’s ROICImage Source: Zacks Investment ResearchFinal ThoughtsInvestors interested in LUNR stock should wait for a better entry point until next Monday, considering its premium valuation and poor ROIC. However, those who already own it may continue to do so, considering its impressive one-year share price performance, solid earnings surprise history and a favorable Zacks Rank. Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Transdigm Group Incorporated (TDG): Free Stock Analysis Report Leidos Holdings, Inc. (LDOS): Free Stock Analysis Report Intuitive Machines, Inc. (LUNR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks