hello everybody so as promised this is my video on Space stalks and there are five space stocks that I want to look at today and I have all run B through my valuation spreadsheet and the only one that somehow someway fits somewhat in my spreadsheet but doesn't really look cheap you know it looks quite expensive that one stock is rocket lab and Rocket lab let me just you know put a disclaimer out there I actually own a leap on Rocket lab that I had bought when that rocket that failed was it was it about a year ago yeah it was I think it was like like 13 or 14 months ago one one of their rocket that crashed and the stock had gotten into a$3 range and I had gotten a leap a single leap on it just took a took a Gamble and we'll see in 2026 what I do if I exercise that leap or or not but the the leap is well in the money now so I have some exposure to Rocket lab um I liked it the first time I had looked at it actually and I I still like it I'm beginning to like it a little more but the problem is it's a it's a whole lot of new knowledge that I have to acquire in order to be able to properly analyze a space stock so that's why I'm just going to stick to the financials and when I look at the financials of Rocket lab well first of all I'm very satisfied with that Rue growth 41% which is a diversified Revenue growth they have multiple customers they have multiple systems right they they not only have some some launch uh Revenue but they also have Space Systems Revenue um so so they have multiple sources of revenue they're A supplier as well as well as a launch provider they specialize in low earth orbit they have they've had some some lasting power they've lasted in the space quite a bit and um a a famous VC in the name of vard KLA is behind rocket lab and and actually uh invests heavily in that in that company so while all of the other companies don't really have the blessing well they may but maybe not as prominent of a person as cost for example this one as the blessing of Costa Adventures which you know is why it led me to to the to to took the leap and buy the leaps right by the leap on it um uh the leaps on it but the the point is here here what I'm trying to make is the revenue growth predicted to it's predicted to be at 41% it looks like as long as they don't fail these launches they are going to have more and more growth and this can last a very long time they could be a credible alternative for low orbit satellites a credible alternative to Space X keep in mind we number two in the space I don't like investing in number two's in the space in any space but the problem is that space X is not public that's problem number one and you know we we don't know know when it will be public um and and you know it's it's kind of a kind of a best play in the space like if you want to be invested in that space and as I study that space I find rocket lab to be the best play in that space anyways really briefly so for Q3 they're predicting 205 million uh in in in in Revenue which which is excellent I'm I'm wondering if I calculated that right I I think I did so that's an excellent amount of Revenue and they're expecting a loss of 32 million 32 million right I take the middle point we're expecting a loss of 32 million so what does that tell you that their iida margin is minus 15% that's what they guided for the next quarter so it's much better than the trailing 12 month iida margin at minus 43% so they're still bleeding cash but bleeding 32 million in a quarter as they as they they give us in the guidance that's much more manage manageable you have a better Runway so they have 497 million of balance sheet so that's 16 quarters or four years of quote unquote loss Runway so they can lose money for four years and of course you know the hope is they're going to get some operating leverage as the revenue keeps growing and they're actually going to get iida profitable and then maybe one day Gap profitable and that's when the stock explodes right that's typically how it works I think they'll make it I think this leaps contract will turn out to have been a good investment for me um but but right now I don't have them to dedicate to studying this company so unfortunately I'm not adding to this stock but it's the only stock in there that I like it's the only stock in there that I like that's it I spoiled the video I guess I guess if you want to know why let me let me keep going so space space Oh it is really rare that we get a negative Enterprise Value um yeah Wall Street is paying you own this stock and so you could say theoretically if you buy the stock at at at a negative Enterprise Value and it goes bankrupt tomorrow and pays everything off theoretical is there's money left over for our shareholders but that's that's theoretical I don't think they're going to file bankruptcy I think they're going to keep going and keep losing the money and and sinking the money into the into the project because space you know that and that's Virgin Galactic if you're not familiar right Virgin Galactic is the name of this company it's it's it's it's it's the child of of Richard Branson that's that's his baby that's his company so he's going to keep pouring money into it in my view um and I I I wouldn't touch this one I I I I would not be interested in this one note that you know you you could have weird Arrangements where the company goes bankrupt and then Richard Branson goes to the bankruptcy court with his own money and it's like yeah okay I'm going to buy buy the company and then the judge is like yeah okay I choose you and you can get the company money back things like that have happened in the past so I I wouldn't put it out of reach that it's what could happen I just want to point out that unfortunately the track record of Virgin in the space race is not that good because virgin orbit also filed for bankruptcy now I want to point out whether it is Virgin orbit or whether it is Virgin Galactic the interest rate environment has absolutely not helped these companies these companies went public at a time when J Powell was saying we're not thinking about thinking about raising rates and think about that this is these are companies that are going after space one of the most Capital intensive projects you could ever go after and so of course the interest rate environment played a major role in the bankruptcy of of Virgin orbit and if bankruptcy comes for space it will have played a major role in my own opinion because the plan initially for a company like space and I remember the IPO that company that plan was was necessarily to raise more phones as the value of the stock goes up because we were going to have a zero interest rate environment this is the type of company that has been entirely killed by the interest rate environment in fact I happen to believe it's kind of a miracle that rocket lab makes it it's a miracle so let me move on to another company here which ISS and this company is space cell phone service space mobile is the name of the company they are building the first cellular Broadband Network and they launched five satellites and the market got really excited and the the stock did a 7x I mean I I can't say I understand how I mean good for you if you own the stock you know n nine months ago that was that's was really good for you cuz that was 7 hex but but as far as far as explaining this through numbers and from my my my habit and my framework of analyzing stocks I just can't explain that one cuz when I was reading the document for them to have a commercializable service for them to start making money from the service they need 90 satellites so they need 90 satellites so so if you read about it online they say oh well you know they may commercialize the space cell phone company right the cell phone service in space we may commercialize it in 27 in 2027 or 2026 you think SpaceX will not have turned on something by then I think that's a very risky bet to take for two reasons one is we know that SpaceX is partnered with T-Mobile SpaceX is partnered with T-Mobile with starlink and So eventually very and this is this is from May 24 right so this this is fairly recent stuff here eventually there may be a partnership with SpaceX and T-Mobile or just SpaceX go it alone and they they will they will capture that market for for themselves they will be the cell phone provider for themselves I I doubt that they will um just not do it they they will do it so again you're playing with a number two in the field of of space cell phone service this is a number two another thing that I absolutely don't like there's two more things that I don't like actually so that that was a first thing I don't like SpaceX I think is going to launch everyone cell phone surface second thing I don't like is the backing of AT&T and Verizon I don't understand it I I I I I I really don't these are bloated companies that are riddled with debt who are just taking a real option by placing a little money into something that could potentially prevent them from being disrupted you know this feels like Volkswagen putting $5 billion into I because someone in the company is an advocate of that idea and is saying hey you know there's there's disruption coming we might we might want to put our chips in right or or or GM back in the day putting money into lift you may remember that to me to me to me this this is this is not very very serious and and the company of course valuation of this company went up quite a bit because because of the Partnerships right because of this and the last thing I'll say is Guess Who launches these satellites the five satellites were launched by SpaceX so your competitor is also launching your product I don't like that I don't like that because it's like you're you're sponsoring SpaceX in a way you're sponsoring your competitor so I don't like that you know I think I think they I think it would be wiser if they actually used rocket lab to launch their service but but in my in my view and of course let me not even get started you know there there's no there's no there's no margin right there's no there's no Revenue to speak of I mean the valuation EV over forward Revenue it's meaningless at this point right it's 630 but these companies are I am not equipped to analyze these most of these companies it's too early it's too early it's much closer to VC investing it's much closer to the style of investing that say Cafe Woods have right caffy Woods AR invest they they they will look at these stocks because they invest earlier in the stage of the development of these businesses than I do me me I like I I like to invest in in businesses that are more mature but are less risky so anyways to me um to me I would stay aware of that of of that one um you know but but good kudos to those who bought it when it was seven times cheaper that's for sure okay now red wire let's talk about red wire and I want to say my viewers you recommended this one I can't remember who it was but thank you for recommended um you got you got my attention with this one there's a lot of things I like about this one and you can see on my spreadsheet is actually 0.35 I mean for the field of space which is which is I mean let's face it it's one of the most hyped up sector in the field of investing actually it's one of the most hyped up sector period people love space they they they have you know for maybe centuries they love space so it's so the valuation I don't expect to be cheap in that sector but this one you caught my attention because there supplier to space agencies and and and and the space station and to people uh running experiments they they they have a diversified Revenue multiple customers the customers need to be thought of in my view when I look at this company they need to thought of as bids and how many bids they place on how many tiny little project and then if they get the project right that's that's something that they can sell they they are building infrastructure in space and they have some satellite infrastructure they have some solar panel infrastructure and they have equipment for a space station and I was particularly impressed when I was looking at their pharmaceutical and Manufacturing in space division um I kind of Follow That space I'm I'm I'm a little passionate about the the the the space of of of genetics and health and and Pharma um you know and there's going to be things in the field of fora that are going to need to be manufactured in space because when you 3D print something say a heart or when you free print a sell it behaves entirely differently and it behaves more favorably when it is manufactured in space so I really like that side business of them there's there's a there's a lot of hot industries that they touch by being this supplier unfortunately in my view they're cutting with way too close to bankruptcy for for for comfort for me and of course they wouldn't go bankrupt they would borrow money etc etc but they're cutting it way too close so adjusted DB usually tracks pretty well um with the cash flow but in this in this case I I I overlooked kind of a cash flow for investment just look at cash flow from operations so it's a minus 9.5 million right and they have 30 million of cashing left left so that's three quarters so you're you're cutting in close as at the run out of money and of course if you go into investor presentation they're quick to show you look our liquidity is 58 uh 55.8 million right but then you got to go there and see it's borrowing capacity right it's it's available borrowing capacity right it's it's kind of like borrowing against your house you're you you have a lot of liquidity you think you can borrow a lot of against your house but but then when you're putting yourself you know deep deep ER into debt so do we want this company to put itself into debt in order to be able to survive well you know yeah and even even then that would just be a year and a half so so this company needs to to stop bleeding cash as small as it may seem that $10 million is as small as it may seem it needs to stop um bleeding cash and and you know I I I think it's possible because we're growing at 31% but to me that's cutting it way too close it's a stock V that I'm open to reanalyzing when those numbers get better and and and we'll see where valuation is at today again the valuation for many of these aside from space obviously from from Virgin but for many of these valuation is is is is quite High I mean look at the valuation for roet lab right I like rocket lab I think it's a it's I I think it's it's a great project but at this valuation I mean I mean you can get some premium companies at this valuation so the last company which of course I'm out on this one it is lunar and lunar was a company that made the buzz because they win a bid from NASA and you know these bids how they work once you win the bid you unlock the funds and as as you unlock the funds as you go through the Milestone the revenue gets recognized but nonetheless it's a this is as single customer as it gets I mean sure they have you know they have they have some commercial payloads but but to me to me this is this is mostly a a play of a company trying to sell to NASA um the for the lunar business right you can see they're they're they're working on this program for say a lunar terrain vehicle and and they want they want that contract so it's so it's good for them um but but nonetheless it's uh it's too risky to me to me to me it's too risky it's too too dependent on contracts too dependent on on on all of that sort of stuff so so I would stay out of this one although it's true that it was a trendy stock I remember was it six or seven months back when they won that contract people were really excited about it and this is I guess what I'll conclude with is all of these companies they they trade a lot on um I hate to say hype but they do trade a lot on hype and this is where I think the arcx ETF from cafy wood the space ETF of caffy wood may be interesting too um and you you could hold it for for a long long time and let's let's assume say there's a there's a huge interest in space because there's a new lunar Mission um you know the one they're planning with SpaceX and everybody's interested in space and oh we see the the the lunar the lunar lander and veent people on the moon again let's say it's 2027 2028 I could easily see the stocks in the space entirely Skyrocket and then that would be maybe an opportunity to sell them right or imagine if we go to Mars imagine imagine how these stocks would would Skyrocket this is this is this is almost something I'm going to call Deep long-term investing let's call it that it's deep long-term investing I mean this is almost the type of long-term investing where it may only make sense to invest in this type of stocks if you're in your 20s right I'm in my 30s ah it makes sense too for your 30s you know what I mean but it's like the it's so longtailed it is it is so longtailed right rocket lab U um what is it uh um what's the name of that company uh red wire all of these companies infrastructure in space Manufacturing in space let's take Manufacturing in space well when will Manufacturing in space happen you know at scale I mean at a meaningful scale will it will it be in the 2030s in the 2040s you know that's a lot of time and that's a lot of disruption potential that cannot be foreseen and that's a l that's also a lot of time for SpaceX to keep growing like a weed as well so because of that I find these stocks risky I'm Happ I'm happy with rocket lab because they're operating I'm not entering any of these other ones and of course as always this channel is no investment advice this video was not investment advice no Financial advice as always this is just entertainment I hope you were entertained please like please sub subscribe thank you for watching and have a wonderful day