Is LUNR Worth Buying as Growth Accelerates but Valuation Stays Rich?

Intuitive Machines, Inc. LUNR is growing far faster than a year ago as satellite production, lunar delivery, national security and communications broaden its revenue base. The expansion is improving visibility, but it has not eliminated execution risk.

The central question is whether record backlog and a more diversified platform justify paying a premium while losses, cash use and contract timing remain meaningful constraints.

LUNR’s Revenue Base is Broadening

Second-quarter 2026 revenues reached $206.2 million, up from $50.3 million a year earlier. Civil customers contributed 38% of revenues, commercial customers 32% and national security customers 30%, compared with just 3% from national security in the prior-year quarter.

That balance makes Intuitive Machines less dependent on a single lunar program. Satellite manufacturing, lunar delivery, Near Space Network Services and other programs now contribute to the top line. L3Harris Technologies LHX also has direct exposure to missile-defense satellite demand through its 18-satellite AMDT3 award, underscoring the scale of national security spending in this market.

Intuitive Machines Has Record Backlog Visibility

Intuitive Machines exited the quarter with a record $1.8 billion backlog after booking $920 million of awards in the period. Management expects 25-30% of that backlog to convert to revenues in 2026, 35-40% in 2027 and the balance later.

The awarded base supports a multi-year growth case, but conversion timing still matters. Management has said contract definitization and revenue timing will help determine where 2026 revenues land within its $900 million-$1 billion guidance range. Rocket Lab Corporation RKLB is also expanding its national-security space business, recently securing a $397 million U.S. Space Force contract to develop, launch and operate multiple satellites for the Space-Based Airborne Moving Target Indicator program.

LUNR Trades Above Its Sub-Industry

LUNR trades at 3.15X forward 12-month price-to-sales, above the Zacks sub-industry’s 2.38X. That premium asks investors to price in substantial growth and improving execution before GAAP profitability is established.

The latest quarter also showed why valuation matters. Intuitive Machines posted an adjusted loss of 16 cents per share compared with the Zacks Consensus Estimate of a loss of seven cents. Revenues of $206.2 million missed the consensus mark of $219 million by 5.9%, even as they increased 309.8% year over year.

Cash and Margin Risks Still Matter for LUNR

Cash and cash equivalents stood at $367.4 million as of June 30, 2026, while operating activities used $59.8 million during the quarter. The liquidity cushion gives the company room to fund production and infrastructure investments, but sustained cash consumption would keep funding risk in focus.

Margins also remain exposed to fixed-price lunar work. The quarter included a $14.7 million estimate-at-completion adjustment tied to IM-4 payload changes, while acquisition-related transaction and integration costs totaled $7.9 million. Management expects positive adjusted EBITDA for 2026 but has not provided a GAAP profitability target.

LUNR’s Investment Case Stays Balanced

The bottom line is that LUNR’s growth case has improved, but the current setup does not clearly favor an aggressive entry. Diversification, backlog and production scale support longer-term revenue visibility, while valuation, margin variability, cash use and contract execution argue for patience.

LUNR’s Price Performance

In the past six months, shares of LUNR have lost 20.2% compared with the industry’s 17.2% decline.

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LUNR’s Zacks Rank

LUNR currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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