Arrival

Arrival (NASDAQ: ARVL) can be easily dismissed as another electric vehicle company. However, what makes this growth stock unique is its approach to producing vehicles. Arrival aims to utilise its in-house technologies to produce rapidly scalable microfactories around the world.

With an estimated cost of $50m, these factories can be set up in a matter of months. Not to mention, they are also 24 times smaller than most other factories. This model allows each factory to achieve unprecedented growth, with an annual gross margin of $100m, producing 10,000 vans a year.

Nonetheless, Arrival now trades at a mere $1.44 after losing 95% of its value from its all-time high. This was the result of an overpriced valuation, delays, and share dilution. That being said, I think the stock is now fairly priced given that its market cap ($920m) is now lower than its total assets ($1.5bn).

After numerous delays, start of production for its vans is set to begin this quarter. This leaves me excited as a long-term investor. Provided that all goes according to plan, I think this growth stock could be a huge winner for years to come.

Astra Space

Astra Space (NASDAQ: ASTR) is a company targeting a niche portion of the space launch market. The firm offers to deliver payloads that are less than 300 kg to low earth orbit (LEO) while charging the most affordable fees.

The company has experienced unprecedented growth in its route to getting to space, as it’s the fastest space launch company to reach orbit. Its cheap method of producing rockets is what sets it apart from the competition. Even with a base launch cost of $2.5m, the Alameda-based firm is twice as cheap as its nearest competitor, Rocket Lab. This has allowed Astra to secure a backlog of over 50 launches with the likes of NASA, Spaceflight, Planet, and many others.

Having said that, Astra has also suffered a monumental drop in its share price of 80% this year. The current bear market hasn’t done growth stocks any favour either. Fears of a potential recession have soured investor sentiment and kept share prices low. Nevertheless, if Astra can manage to somehow deliver on its promises of daily launches by 2025, its current share price is going to be a steal.

Stunted growth?

Given the tremendous amount of potential from these growth stocks, are they a buy? Well, it’s important to note that while these companies have the potential to deliver a monumental return on investment, they can also fail.

I’m definitely intrigued by Arrival’s growth prospects. Even so, its cash position leaves me worried. With just $500m of cash, the unicorn has proposed restructuring its business. On the other hand, Astra has gone quiet since its most recent failed TROPICS launch. With no word from management as to what lies next for the company, I think there’s too much risk involved to buy more shares. As such, I’m holding onto both my Arrival and Astra positions for the time being.

The post These 2 growth stocks could be huge winners in the next decade and beyond appeared first on The Twelfth Magpie.

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John Choong owns shares of Arrival and Astra Space. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Astra Space (NASDAQ: ASTR) share price has been plummeting as of late. The space launch company had already lost more than 80% of its value since its initial public offering. Nonetheless, recent events and a failed satellite deployment have plunged the Astra Space share price to an all-time low. Therefore, this could be a buying opportunity for me.

A tropical storm

After weeks of delays in getting a launch license from the US Federal Aviation Administration, Astra finally got under way on Sunday to launch its payload of satellites into space. However, despite a successful launch, the rocket’s second engine abruptly shut down. This meant that the satellites failed to reach the desired destination. While the reasons for this are still being investigated, NASA did release a statement, and has paused its next two launches with Astra.

Despite a loss of the first two of six satellites, the TROPICS constellation will still meet its science objectives with the four remaining CubeSats distributed in two orbits. With four satellites, TROPICS will still provide improved time-resolved observations of tropical cyclones compared to traditional observing methods… NASA will lend any expertise needed but would expect to pause the launch effort with Astra while an investigation is being conducted to ensure we move forward when ready. 

Source: NASA

Renowned astronomer Scott Manley gave his opinion on why the satellites didn’t reach their destination. He believes that the engine failure led to the rocket’s inability to orient itself toward the designated coordinates. As a result, the rocket overshot its target. Having said that, he isn’t sure what caused the engine to fail either.

‘Cheap’ failure

Amid all the panic, however, I think it’s important to zoom out and assess the economics and business model of Astra. The Alameda-based company offers the cheapest launch price of any of its competitors. At a base launch price of $2.5m, Astra would theoretically need to fail two out of its three launches, before its nearest competitor, Rocket Lab becomes economical. And, Astra transports satellites weighing less than 150kg (Class D), which are much easier to build than other, bigger satellites. This means that for smaller satellites, Astra still remains the straightforward option.

Nevertheless, Astra has plenty on the line. With its share price deep into penny stock territory, Astra needs to prove its worth or risks going under. Another failure would deem its following TROPICS launch redundant, and impact its already tarnished image.

Refuelling is very likely

To make matters worse, Astra isn’t in the best cash position either. With an accelerating cash burn, I am beginning to worry whether the company can survive without having to raise capital. Given its low share price already, dilution isn’t expected to happen. As such, the company is likely to take on debt. This isn’t ideal with interest rates expected to grow over the coming months.

So, is Astra Space stock a buy for me then? While many have been exiting their positions lately, it’s important to remember that the space industry is new and challenging. Elon Musk has even said so himself.

SpaceX, for all its success, had its fair share of failures too. It’s easy to forget in gloomy times that Astra is the fastest company to get its rocket to space, and it’s still this same management team that will be addressing this recent setback. Thus, I’ll be waiting for the results of the investigation before buying more. But for now, I’ll be holding onto Astra Space stock.

The post Astra Space stock is crashing. Should I buy? appeared first on The Twelfth Magpie.

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John Choong owns shares of Astra Space at the time of writing. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

American launch vehicle company Astra Space (NASDAQ: ASTR) reported its Q1 earnings results yesterday evening. EBITDA was in line with guidance at a loss of $47.5m, and comments made on the earnings call paint a bright future ahead. With plenty of launches coming up and the development of its other offerings that include space products and space services, I think the Astra Space share price could be set for lift off.

Cheap rockets, cheap valuations

Since Astra IPO’d last year, its share price has taken a beating. It’s down 70%, as is the case with many growth and tech stocks. Nonetheless, given the success of its most recent payload delivery, I believe the company has a bright future ahead of it. Astra’s USP is its ability to manufacture the cheapest rockets on the market, on scale. It also aims to provide weekly launches by 2024 and daily launches by 2025. This is something its competitors are yet to offer.

As the first batch of revenue came in, Astra managed to secure $3.9m for its two launches (One failed, one successful). Although the cost of revenue is almost three times of that, the team expects this to reduce with higher margins as the service scales. Alongside that, it also secured orders for 61 Astra Spacecraft Engines from a number of customers. The company expects the order pipeline to grow given the industry’s high demand for satellites.

Hot Tropics

When CEO Chris Kemp was quizzed about the status of the upcoming Tropics launches on the earnings call, he noted that rockets were on standby and awaiting license confirmation. While he doesn’t expect all six rockets to launch by the end of Q2, he mentioned Astra’s intention to launch all of them before Q3 concludes. If the team from Alameda can pull all these launches off successfully, I think that the share price will start to pick up some momentum.

Could fuel burn out?

A business like this one needs cash to keep going. I was worried when I saw Astra’s cash and equivalents come in at a mere $162m. This is significantly down from $325m in the last quarter as the Nasdaq-listed company burned cash at its fastest rate. With that spend, Astra has completed the expansion of its facility. Additionally, it has installed most of the equipment for high-scale rocket manufacturing.

CFO Kelyn Brannon mentioned on the earnings call that capex and opex should taper off substantially in the coming quarters. However, Q2 is still expected to weigh heavily on the balance sheet. As such, I am wary of the firm’s potential need to raise capital in the near future.

Nevertheless, a balance sheet with no outstanding debt leaves Astra in a healthy position to grow and expand. Another launch from the Department of Defense was also added to the $160m launch backlog, showing that demand for Astra’s services is increasing. With Rocket 4 set to be showcased at next week’s Spacetech Day, these are exciting times for firm and for me as a shareholder. So, with the Astra share price currently at historic lows, I’ll be buying more shares before take off!

The post The Astra Space share price could be about to lift off! appeared first on The Twelfth Magpie.

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John Choong owns shares of Astra Space at the time of writing. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With an abundance of space stocks having recently come to market, I believe that Astra Space (NASDAQ: ASTR) is best suited to conquer the small launch vehicle market. The company delivers satellites and other payloads for its customers with the use of its small rockets. So, with the Astra share price down 45% year to date (YTD), this could be an opportunity for me to buy the dip on this space stock.

Astra ordinary

Astra has achieved a feat that its competitors haven’t. It’s the fastest space launch company to reach orbit, only taking five years. This wouldn’t have been possible without the leadership and vision of CEO Chris Kemp and his co-founder, Adam London. Prior to being Astra’s co-founder, Kemp was the CTO at NASA while London led initiatives of miniaturising high-performance rocket tech.

This attracted the support and funding of multiple governmental space agencies, which has led to Astra’s obtainment of a Part 450 license from the US Federal Aviation Administration. The license allows for a higher launch frequency and greater regulatory flexibility.

The launch company’s financials are also in tip top condition. Its excellent balance sheet with zero debt and $325m in cash and equivalents leaves the launch company in a healthy position. As such, it can scale its services without having to raise capital for the foreseeable future. This is in part due to its ability to produce the cheapest rockets in the market.

Space to grow

Although Astra’s current rocket only carries up to 150kg to low earth orbit (LEO), Kemp has mentioned his intention to build another rocket. Rocket 4 will be able to carry much heavier payloads beyond LEO with trials expected to commence in Q3. This is to capture customers from the sanctioned Soyuz service that have heavier satellites. Moreover, its partnership with Spaceflight, the leading global launch services provider, should help Astra achieve its goal of daily launches by 2025.

To complement this, Astra has launch contracts with NASA, Space Force, the US Department of Defense, Planet, and Spire Global. With industry tailwinds of an increasing lightweight satellite market, Astra has plenty of momentum on its side, having already secured $160m in total deal value as of Q4 2021.

So, what happens after 2025? Well, Astra is expected to expand its offering beyond launch services, as the CEO disclosed Astra’s goals to offer space products and services. These include electric propulsion systems and constellation services for networks. In fact, Astra recently secured a deal with Leostella to provide multiple engines and propulsion systems for its satellites.

Staying grounded

Despite the potential of this space stock, I think it’s also important to be realistic with my expectations. Delays and setbacks are more not uncommon in such a new industry, with Astra already experiencing a couple. Pair that with a slowing economy, and Astra’s goal of daily launches may suffer hiccups along the way. Nevertheless, I am bullish about the company’s prospects for the future and its ability to outdo its peers. With an average target price of $5, this presents a 50% upside to its current share price. Therefore, I’ll be looking to buy more shares in Astra at a bargain.

The post The best space stock to buy and hold until 2030! appeared first on The Twelfth Magpie.

More reading

• Why Barclays shares could have a huge second half of 2026
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• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
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John Choong owns shares of Astra Space at the time of writing. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.