The Astra Space share price could be about to lift off!

Astra Space recently reported its Q1 results. With plenty of exciting developments on the horizon, the Astra Space share price could soar very soon.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Abstract 3d arrows with rocket

Image source: Getty Images

Key Points

  • Astra Space just reported its Q1 2022 results, with figures matching guidance.
  • With the share price 70% down since its IPO, recent developments could send it roaring back up.
  • The cash burn is a concerning factor, however. A close eye will need to be kept on those figures moving forward.

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.

QuarterCash Burn
Q3 2021$69m
Q4 2021$54m
Q1 2022$163m
Source: Astra Space Investor Relations

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!

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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.

More on Investing Articles

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

With a spare £500 I’d buy these UK shares

A financial services giant, a FTSE 250 distributor, a FTSE 100 tech stock, and a gold miner are on the…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Should I buy this defensive FTSE 100 stock for growth and returns?

This Fool takes a closer look at a FTSE 100 stock to see if it could boost his holdings via…

Read more »

Young female analyst working at her desk in the office
Investing Articles

I robbed Mr Market of this cheap FTSE stock!

This FTSE 250 stock has crashed by almost 30% in six months. But I recently bought into this battered business…

Read more »

Mature people enjoying time together during road trip
Investing Articles

3 reasons I’m backing NIO shares to soar!

NIO shares have bounced up and down this year. But where will the share price go next? My bet is…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Up 300%, is the Hurricane Energy share price an opportunity too good to miss?

This Fool looks at why the Hurricane Energy share price has soared in the past 12 months. Should he buy…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

The BT share price crashes 20% in a month. Buy now?

The BT share price has crashed by almost a fifth since coming close to £2 on 12 July. After this…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

How I’d invest £1,000 in growth shares today to target £5,000 in a decade

Our writer reckons he could do well by choosing the right growth shares today and holding them in his portfolio…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

How passive income from stocks can speed up early retirement

By investing patiently over the years, buying quality shares has given me enough passive income to retire 10 or even…

Read more »