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Boeing Spends on Isotropic Systems to Boost Space Solutions

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The Boeing Company (BA - Free Report) recently announced its capital venture in Isotropic Systems Ltd — a European startup engaged in the designing and development of antennas for satellites. Notably, this latest move is in line with this renowned jet maker’s consistent efforts to steadily expand its satellite and space-based capabilities.

Financial terms of the deal were kept under wraps.

Benefits of the Investment

Isotropic is currently developing the world’s first multi-service, high-bandwidth, low power, fully-integrated range of high throughput terminals to support the satellite industry, going beyond the traditional market convention. Utilizing Isotropic's innovative user terminals, one can simultaneously connect with several different satellites without increasing cost or complexity. This feature should promote low-cost, mass-market broadband connectivity for consumers and help companies meet growing demand for satellite data, mobility and broadband services even in the most remote places.

Thanks to the latest transaction, the Isotropic team and Boeing experts will jointly make efforts to strengthen the development of the next-generation terminal solutions. Considering the aforementioned developments, investment in this private concern should enable Boeing to secure a leading position in space innovation by offering cost-effective solutions.

What Led to the Venture?

In response to intensifying competition in the U.S. aerospace and defense industry, major players in this space have lately resorted to unconventional business line expansion. Boeing is no exception. It has been working for decades to further strengthen its space business unit.

From the first Mercury capsule to the current International Space Station, and beyond to the Space Launch System, Boeing has taken humans and technology farther than they’ve ever been. In fact, Boeing has been working with NASA’s Space Launch System (SLS) program for long to strengthen and expand the United States’ space solutions.

Coming to its latest endeavors, the company unveiled its “Deep Space Gateway” and “Deep Space Transport” concepts to fulfill mankind’s desire to explore the space, from the Moon to Mars, in 2017. For making these efforts successful, the company is acquiring or investing in other organizations to incorporate more modern technology and strengthen its space-product portfolio.

For instance, in the third quarter of 2018, Boeing completed the acquisition of Millennium Space Systems — a provider of agile, flight proven small-satellite solutions complementing its existing satellite portfolio. In April 2018, Boeing invested in Reaction Engines, a U.K.-based propulsion systems provider, which can contribute to the next generation of hypersonic flight and space access vehicles. Continuing this trend, we believe, Boeing invested in Isotropic with a desire to significantly boost its space solutions product line beyond the reach of traditional market approaches.

Price Performance

In a year’s time, shares of Boeing have gained about 5.6% against the industry’s 5.9% decline. The outperformance was primarily led by significant demand for the company’s military jets across the globe along with robust long-term demand for its commercial aircraft.

Zacks Rank & Other Stocks to Consider

Boeing currently carries a Zacks Rank #1 (Strong Buy). Some other top-ranked companies in the same sector are AeroVironment, Inc. (AVAV - Free Report) , Heico Corp. (HEI - Free Report) and Aerojet Rocketdyne . While AeroVironment sports a Zacks Rank #1, Heico and Aerojet Rocketdyne has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AeroVironment delivered average positive earnings surprise of 257.01% in the last four quarters. The Zacks Consensus Estimate for fiscal 2019 earnings has moved 33.3% north to $1.48 over the past 90 days.

Heico’s estimated long-term earnings growth rate currently stands at 12.10%. The Zacks Consensus Estimate for the company’s earnings in 2019 has climbed 4% to $2.08 over the past 90 days.

Aerojet’s estimated long-term earnings growth rate currently stands at 5.5%. The Zacks Consensus Estimate for the company’s earnings in 2019 has moved up 9.8% to $1.42 over the past 90 days.

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