Here at The Motley Fool, I write a lot about space stocks. One space stock I have not written much about is Uruguay-based Satellogic (NASDAQ: SATL), which is halfway to completing a 90-satellite constellation for use providing high-resolution satellite photography to customers down on Earth.
But it's hard not to notice Satellogic stock today, as it shoots up 23.5% through 12:05 p.m. ET on a new contract announcement.
Satellogic's big news
This morning Satellogic announced it is tripling the amount of satellite data it provides to satellite data analytics company SynMax, for use by hedge funds and financial analysts who track oil and gas production around the world. In its press release, Satellogic notes it will be providing data on activity at more than 100 wellheads across North America. SynMax will then use artificial intelligence to process this data for insights to help analysts better estimate oil and gas production levels at these sites -- to better predict global oil supplies and pricing data.
Satellogic did not, however, state what financial implications this contract will have for it, either in terms of revenue or profit. This suggests that whatever the numbers are, they're probably not material to its business.
Is Satellogic stock a buy?
That could be a problem for investors, because despite what today's outsize surge in Satellogic's stock price might suggest, this is a company that could really use some profit. Over the last 12 reported months, Satellogic has racked up more than $64 million in net losses, and more than $55 million in negative free cash flow. For a company with less than $26 million in cash on hand, this implies that Satellogic might run out of cash within the next six months.
To stave off that prospect, Satellogic did announce today that it is selling $10 million in new stock to a provide buyer. That only suffices to keep the lights on for another couple of months, though. Unless and until Satellogic can earn some profit, I'm afraid the stock still looks too risky to buy.
Should you invest $1,000 in Satellogic right now?
Before you buy stock in Satellogic, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Satellogic wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $872,947!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of December 9, 2024
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
