BlackSky Technology (BKSY -1.05%) stock has gained 42% over the past 52 weeks -- and its run is not yet done.
On Tuesday, the Earth observation satellite operator posted a 15% gain through 3 p.m. ET, after announcing a "six-figure contract ... to provide immediate, subscription-based on-demand Gen-2 imagery and analytics services" to an international customer.
NYSE: BKSY
Key Data Points
BlackSky's "big" news
How big is a "six-figure" contract? Big enough that I wouldn't mind winning one, to be sure. But for a space stock like BlackSky, it's probably insignificant. Six figures means the contract could be worth as little as $100,000 annually, and it must be less than $1 million. That's less than 1% of the company's $107 million in trailing-12-month revenue, maybe as little as 0.1%, and potentially even less. After all, BlackSky didn't say whether the "six figures" will be paid annually or over a term of years.
You wouldn't think news with so many caveats would move this stock much, and yet it did. So why?
BlackSky clarified that its customer is new, so this is not an extension or even an expansion of an existing contract, and these revenues will be additive for the company. BlackSky noted it will create an "advanced national space-based intelligence expertise" for the customer. This hints the customer may be a nation-state (and so have access to significant funds to expand the relationship).
I suppose these are points in its favor, and they help explain investors' reaction to the news.
Is BlackSky stock a buy?
Still, we're looking at a space stock costing more than 5 times annual sales, which by my metrics means it's a bit expensive. It's also a space stock with negative earnings (trailing-12-month losses topped $41 million), burning cash at the rate of almost $55 million per year, and with only $106 million in the bank.
BlackSky's still got a couple of years before it's out of money. It's also not expected to turn profitable before 2028 -- three years away. A buy at today's price, I fear, remains speculative.
