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Intuitive Machines (LUNR +56%) is orbiting well above its flatline today after winning a $4.82 bln NASA contract yesterday after the close. This is not the first time LUNR has displayed its technological capabilities for NASA, securing a roughly $117 mln contract in August, news of which sent its shares soaring. However, nothing has compared in value to yesterday's $4.82 bln ten-year contract, a massive win for LUNR given it registered around $115 mln in total revenue through 1H24.

• What does LUNR do? LUNR is a space infrastructure firm committed to contributing to establishing infrastructure and commerce on the Moon. While its mission is ambitious, LUNR has been efficiently developing products and providing services for NASA and several other commercial payload customers. The company exited Q2 with zero debt on its balance sheet and sufficient cash to fund operations for the next 12 months.
• Details of the $4.82 bln NASA contract involve providing services supporting NASA's Artemis mission, which involves establishing a presence on the Moon. NASA's goal directly aligns with LUNR's goal, making the two an excellent pairing.
• While today's pop reflects tremendous enthusiasm, LUNR could still encounter setbacks. Space shuttle launches are extraordinarily challenging and can encounter numerous delays and problems. For example, Boeing's (BA) Starliner spacecraft has faced numerous issues, from leaks to thruster malfunctions. Additionally, it is worth noting that ten years is not a guarantee; NASA will have the option to extend the contract come September 2029.
• Furthermore, given how explosive today's move is, LUNR could take the opportunity to raise funds through stock offerings. However, LUNR has already noted that it has ample cash on hand. Also, the company booked nearly $70 mln of new backlog this year, noting it still has several sizeable opportunities on the horizon. Meanwhile, following a successful first half of the year, LUNR raised its FY24 revenue outlook to $210-240 mln from $200-210 mln. Still, stock offerings are something to keep in mind as LUNR funds its new NASA contract.

Bottom line, the $4.82 bln NASA contract underscores LUNR's technological edge in providing space communications and navigation. If NASA's Artemis mission ultimately succeeds in establishing a presence on the Moon, LUNR stands to reap enormous benefits. However, the timeline here is long, and LUNR could face many speed bumps in the short run.