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.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

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.