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BlackSky Technology Gains 20% in 6 Months: How to Play the Stock?
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BlackSky Technology Inc. (BKSY - Free Report) stock has shown an impressive performance over the past six months. The stock has gained 20.2%, underperforming the 40.5% rally of the industry but outpacing the 13.1% rise of the Zacks S&P 500 composite.
Six Months Price Performance
Image Source: Zacks Investment Research
BKSY’s performance is stronger than that of its competitors, Mistras Group, Inc. (MG - Free Report) and Forrester Research, Inc. (FORR - Free Report) . MG has risen 5.6%, but FORR has declined by 5.9% over the same period
As of the last trading session, the stock closed at $10.8, 31.1% lower than the 52-week high of $14.2. BKSY is trading above its 50-day moving average, indicating a bullish sentiment among investors.
BKSY Stock Trades Above 50-Day Moving Average
Image Source: Zacks Investment Research
Given the rise in the BlackSky Technology stock, investors might be inclined to buy it. However, the important question is whether investors should buy the stock, hold it, or sell it. Let us find out.
BKSY’s Contract Wins Reflect Rising Demand
Recently, BlackSky was awarded a seven-figure data services contract from an Australia-based company, High Earth Orbit Robotics, to bring automated low-latency capabilities to non-Earth imaging services for the intelligence, defense and commercial use domain.
In the third quarter of 2024, BlackSky won new and follow-on contracts worth $780 million. It has marked one of the company’s highest bookings over the past two years. Rising demand for the company’s frequency imagery and advanced analytics from U.S. Defense and intelligence agencies fueled the rise in contracts. The Indefinite Delivery Indefinite Quantity (IDIQ) contract from NASA worth $476 million was the most valuable among several contracts that BKSY had entered.
The company entered an IDIQ contract with NASA to support its commercial small-sat data acquisition program. Per the agreement, BlackSky will provide NASA with high-revisit satellite imaging data to NASA, which will be utilized in Earth and applied science research. A U.S. Navy research contract was awarded to the company to develop an Optical Inter-Satellited Link for Gen-3 imaging satellites that will provide warfighters with access to real-time images. This project supports the Navy’s Project Overmatch and the Department of Defense Joint All Domain Command and Control programs.
The company has landed several other contracts, including a 5-year Luno A contract worth up to $290 million. It is one of the largest government contracts that aims to procure space-based analytics services. This followed after the Luno contract that BKSY was awarded in 2021.
Recently, a customer from the international defense sector entered a $6-million contract agreement with BKSY. This expansion makes the total annual commitment from the customer to approximately $18 million. Furthermore, BKSY is witnessing success from the Global Data Marketplace, which is an online marketplace that streamlines the buyout process for U.S. government end users.
The rising number of contracts indicates a potential increased revenue generation and profits. It suggests that BKSY is a strong player in its industry, with an edge over its competitors. This can pave the way for the company to gain market share and increase brand recognition.
BlackSky’s Balance Sheet Position Looks Strong
In the third quarter of 2024, the company completed an equity capital raise, generating $46 million. This surplus fund strengthens BKSY’s balance sheet, and the company believes that it will fully fund its baseline Gen 3 constellation business plan. The transaction resulted in the company holding $64.4 million of cash, restricted cash and short-term investments.
The ending balance included the net process of $44.6 million generated in the quarter and $10 million debt repayment on the commercial bank line, which is available for the company to draw when required.
BlackSky’s Liquidity Surpasses Industry
The company’s liquidity position is strong, with the current ratio of 5.68 at the end of the third quarter of 2024, way higher than the industry’s 0.85. The current ratio has increased 35.9% from the preceding quarter and 49.9% from the year-ago quarter. A current ratio above 1 suggests that the company can easily pay off its short-term obligations.
Image Source: Zacks Investment Research
BKSY’s Top-Line Prospects Look Optimistic
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $105.3 million, suggesting 11.5% growth from the year-ago reported level. For 2025, the top line is anticipated to rise 24.2% year over year.
BlackSky’s EPS Estimates Have Moved Up
Two estimates for the third quarter of 2024 moved upward over the past 60 days versus no downward revision. For 2024, one estimate has moved north over the past 60 days versus no southward revision. This suggests analysts' confidence in the company's ability to improve its financial performance soon.
BKSY: A Must-Have Stock
BlackSky presents a stellar investment case with a surge in multi-million-dollar contracts, elevating its competitive position in the market, strong balance sheet position to fund its business plan and robust liquidity position, which surpasses the industry. Its strong top-line prospects and upward EPS estimates from analysts indicate a bright future. Hence, we recommend investors buy this stock as it has upbeat growth prospects.
Image: Bigstock
BlackSky Technology Gains 20% in 6 Months: How to Play the Stock?
BlackSky Technology Inc. (BKSY - Free Report) stock has shown an impressive performance over the past six months. The stock has gained 20.2%, underperforming the 40.5% rally of the industry but outpacing the 13.1% rise of the Zacks S&P 500 composite.
Six Months Price Performance
BKSY’s performance is stronger than that of its competitors, Mistras Group, Inc. (MG - Free Report) and Forrester Research, Inc. (FORR - Free Report) . MG has risen 5.6%, but FORR has declined by 5.9% over the same period
As of the last trading session, the stock closed at $10.8, 31.1% lower than the 52-week high of $14.2. BKSY is trading above its 50-day moving average, indicating a bullish sentiment among investors.
BKSY Stock Trades Above 50-Day Moving Average
Given the rise in the BlackSky Technology stock, investors might be inclined to buy it. However, the important question is whether investors should buy the stock, hold it, or sell it. Let us find out.
BKSY’s Contract Wins Reflect Rising Demand
Recently, BlackSky was awarded a seven-figure data services contract from an Australia-based company, High Earth Orbit Robotics, to bring automated low-latency capabilities to non-Earth imaging services for the intelligence, defense and commercial use domain.
In the third quarter of 2024, BlackSky won new and follow-on contracts worth $780 million. It has marked one of the company’s highest bookings over the past two years. Rising demand for the company’s frequency imagery and advanced analytics from U.S. Defense and intelligence agencies fueled the rise in contracts. The Indefinite Delivery Indefinite Quantity (IDIQ) contract from NASA worth $476 million was the most valuable among several contracts that BKSY had entered.
The company entered an IDIQ contract with NASA to support its commercial small-sat data acquisition program. Per the agreement, BlackSky will provide NASA with high-revisit satellite imaging data to NASA, which will be utilized in Earth and applied science research. A U.S. Navy research contract was awarded to the company to develop an Optical Inter-Satellited Link for Gen-3 imaging satellites that will provide warfighters with access to real-time images. This project supports the Navy’s Project Overmatch and the Department of Defense Joint All Domain Command and Control programs.
The company has landed several other contracts, including a 5-year Luno A contract worth up to $290 million. It is one of the largest government contracts that aims to procure space-based analytics services. This followed after the Luno contract that BKSY was awarded in 2021.
Recently, a customer from the international defense sector entered a $6-million contract agreement with BKSY. This expansion makes the total annual commitment from the customer to approximately $18 million. Furthermore, BKSY is witnessing success from the Global Data Marketplace, which is an online marketplace that streamlines the buyout process for U.S. government end users.
The rising number of contracts indicates a potential increased revenue generation and profits. It suggests that BKSY is a strong player in its industry, with an edge over its competitors. This can pave the way for the company to gain market share and increase brand recognition.
BlackSky’s Balance Sheet Position Looks Strong
In the third quarter of 2024, the company completed an equity capital raise, generating $46 million. This surplus fund strengthens BKSY’s balance sheet, and the company believes that it will fully fund its baseline Gen 3 constellation business plan. The transaction resulted in the company holding $64.4 million of cash, restricted cash and short-term investments.
The ending balance included the net process of $44.6 million generated in the quarter and $10 million debt repayment on the commercial bank line, which is available for the company to draw when required.
BlackSky’s Liquidity Surpasses Industry
The company’s liquidity position is strong, with the current ratio of 5.68 at the end of the third quarter of 2024, way higher than the industry’s 0.85. The current ratio has increased 35.9% from the preceding quarter and 49.9% from the year-ago quarter. A current ratio above 1 suggests that the company can easily pay off its short-term obligations.
BKSY’s Top-Line Prospects Look Optimistic
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $105.3 million, suggesting 11.5% growth from the year-ago reported level. For 2025, the top line is anticipated to rise 24.2% year over year.
BlackSky’s EPS Estimates Have Moved Up
Two estimates for the third quarter of 2024 moved upward over the past 60 days versus no downward revision. For 2024, one estimate has moved north over the past 60 days versus no southward revision. This suggests analysts' confidence in the company's ability to improve its financial performance soon.
BKSY: A Must-Have Stock
BlackSky presents a stellar investment case with a surge in multi-million-dollar contracts, elevating its competitive position in the market, strong balance sheet position to fund its business plan and robust liquidity position, which surpasses the industry. Its strong top-line prospects and upward EPS estimates from analysts indicate a bright future. Hence, we recommend investors buy this stock as it has upbeat growth prospects.
BKSY currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.