Stock surge for BlackSky Technology today
**BlackSky Technology Secures Major Contract, Boosting Financial Outlook**
BlackSky Technology, a leading provider of digital satellite photos of Earth from space, has recently secured a significant contract worth $24 million over four years from the National Geospatial-Intelligence Agency (NGA). This contract, titled "Luno A Facility Operational Monitoring," is a delivery order under a larger umbrella contract awarded last year.
The contract requires BlackSky to use satellite imagery for its monitoring activities, as well as to perform AI-enabled object and pattern-of-life change detection. The purpose of the contract is to monitor trends and anomalies in vehicle, aircraft, vessel, railcar, and ground equipment activity at military and economic facilities worldwide, including ports, airfields, military installations, and railways.
This latest contract could potentially be worth an extra $6 million per year, and the value could increase further as more delivery orders under the original umbrella contract are received. The contract has had a positive impact on BlackSky's stock, which increased by 18.9% through 12:35 p.m. ET Thursday. Canaccord Genuity analyst Austin Moeller raised his price target on BlackSky stock from $14 to $20 per share in response to the contract.
However, despite the stock's increase, BlackSky's revenues are up less than 10%, and the company is still burning cash and losing about $54 million a year. BlackSky Technology has not yet turned a profit. Analysts do not expect the company to earn its first profit before 2028 at the earliest.
BlackSky's financial outlook is bolstered by its strong contracts, analyst forecasts indicating significant revenue growth, and its strategic position in a market driven by geopolitical tensions and technological innovation. However, the company faces challenges such as negative margins and a reliance on future growth to justify its stock valuation.
As of now, BlackSky's stock is trading at $20 per share, but the analysis suggests it may still be too expensive to buy. Analysts polled by S&P Global Market Intelligence were involved in the assessment of BlackSky's financial standing, and HC Wainwright recently upgraded the stock's price target from $20.00 to $28.00, maintaining a "buy" rating. The stock has shown volatility but remains attractive due to its growth potential and strategic positioning in the satellite services market.
[1] BlackSky Technology Q3 2022 Earnings Release, 2 November 2022,
- The contract with the National Geospatial-Intelligence Agency has opened avenues for BlackSky Technology to invest in advanced science and technology, such as AI and satellite imaging, for future projects.
- With the increased financial inflow from the contract, BlackSky Technology is looking to expand its horizon beyond space-and-astronomy, exploring opportunities in other sectors like finance and technology.
- Despite the positive outlook, analysts are urging investors to exercise caution while investing in BlackSky Technology stocks, citing concerns about the company's current negative margins and reliance on future growth.
