Veteran trader takes second look at space-intel company

Irving Berlin wrote about nothing but “Blue Skies” from now on, but that was a long time ago.

Now, we’re going to take another look at that big old hunk of atmosphere hanging over our heads and ask The Rolling Stones to “Paint It Black.”

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Specifically, we’re talking BlackSky Technology  (BKSY) , which has been taking off — literally.

The real-time-space-intelligence company delivers on-demand high-frequency imagery, analytics and monitoring of the most critical and strategic locations, economic assets and events in the world.

“Global conflict, economic uncertainty and national security threats highlight the necessity for governments and businesses to see, understand and anticipate change so they can make fast decisions,” BlackSky says on its website.

The Herndon, Va., company promises dawn-to-dusk imagery, captured 15 times a day, that showcases activity no one else sees. 

And it’ll get that information to you pretty darn fast: Customers receive imagery and analytics in under 90 minutes.

Space-intelligence provider BlackSky recently teamed up with Rocket Lab USA. Here, a Rocket Lab rocket lifts off.

Rocket Lab USA

BlackSky to Rocket Lab: ‘Thanks for the ride’

Rocket Lab launched the first in a new generation of imaging satellites for BlackSky on Feb. 18 at almost the same time Elon Musk’s SpaceX achieved a new milestone in recovery of Falcon 9 boosters, Space News reported.

A Rocket Lab Electron rocket blasted off from New Zealand in a launch named “Fasten Your Space Belts.” The satellite, which is part of BlackSky’s new Gen-3 series, will provide high-resolution 35-centimeter imagery.

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The satellites can perform observations at short-wave infrared wavelengths that can penetrate smoke and haze.

Electron deployed the satellite into a circular orbit 292 miles above Earth about 55.5 minutes after liftoff as planned, Rocket Lab said on X, adding “welcome to space, @blacksky_inc.”

“Thanks for the ride, @RocketLab!” BlackSky responded.

BlackSky signed a contract in August 2023 for five Electron launches. This was the second Electron launch of the year and the 60th for the vehicle overall.

“This launch represents a major inflection point for our global defense and intelligence customer base as BlackSky introduces very-high-resolution Gen-3 capabilities to our high-frequency, low-latency monitoring constellation,” BlackSky Chief Executive Brian O’Toole said in a statement. 

“As more Gen-3 satellites complete production, we expect a regular cadence of additional launches over the coming year.”

Oppenheimer triples BlackSky target

Oppenheimer tripled its price target on BlackSky to $30 and affirmed an outperform rating on the shares.

The investment firm said the company’s successful launch with Rocket Lab greatly reduces risk, with its latest iteration up in orbit and working.

Oppenheimer said it now had a better line of sight into future launches, with at least four more Gen-3 launches set for this year. 

The firm expects more powerful Gen-3 satellites to convert backlog to revenue and major new services.

Trader: BlackSky gaining traction

On Feb. 13 BlackSky said it had won multiyear contracts that include “Assured access to subscription-based low-latency, high-cadence imagery and AI-enabled analytics services.”

The deals also include the delivery of a “high-resolution Earth observation satellite and launch support operations and on-orbit maintenance services. 

The contracts combined are valued in the eight figures. A company statement didn’t specify the value.

Related: Veteran trader who forecast Rocket Lab’s rally reboots stock price target

On Feb, 18, BlackSky said it won a six-figure contract from a new strategic international customer. The company will provide subscription-based on-demand Gen-2 imagery and analytics services and analyst training on the AI-powered BlackSky Spectra multi-intelligence tasking and analytics platform.

BlackSky shares are up 70% this year and up 55% from a year ago. The stock on Feb. 20 closed down 8.3% at $18.31. 

The company is scheduled to report fourth-quarter and full-year results on March 6. Analysts are looking for BlackSky to report an adjusted loss of 27 cents a share on $24.23 million in revenue.

In November, the company reported a third-quarter loss of 66 cents a share.on revenue of $22.5 million.

“Demand for our space-based intelligence solutions has never been higher as we delivered near record bookings, which is further expanding our customer base and strengthening BlackSky’s position to achieve long-term profitable growth,” O’Toole told analysts during the company’s earnings call.

Stephen Guilfoyle noted that BlackSky is still losing money, but he said in his TheStreet Pro column that “this firm is just starting to gain some traction and just starting to turn the corner.” 

“We’ll likely have a down day in this name this week,” which might “provide a better point of entry for those not already wearing a few of these shares,” said the veteran trader, whose career dates back the floor of the New York Stock Exchange in the 1980s. 

“The current situation is fine, so there is no internal fiscal crisis at the firm,” Guilfoyle added. “The long-term debt load is something to watch and will have to be dealt with.”

Having Rocket Lab USA for a partner is not a bad thing, he said, since, as readers know, “that has been our space name for quite some time.”

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