Key Points
NASA chooses eight companies to share $10 billion in contracts to deliver payloads to the moon.
The 10-year contract period could expand to 15 years, and the contract awards could rise to $15 billion.
Intuitive Machines (NASDAQ:LUNR) stock rocketed 12% through 12:45 p.m. ET Monday on news that NASA has chosen it (and seven other companies besides) to perform lunar cargo deliveries worth up to $10 billion.
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Details, please
According to the NASA press release, the following eight companies have been chosen to compete task-by-task for awards under the Commercial Lunar Payload Services, or CLPS initiative:
- Blue Origin
- Firefly Aerospace (NASDAQ:FLY)
- Intuitive Machines
- ispace-U.S.
- Lockheed Martin Space (NYSE:LMT)
- Northrop Grumman Space Systems (NYSE:NOC)
- SpaceX (NASDAQ:SPCX)
- Voyager Technologies (NYSE:VOYG)
NASA describes the contract as a "10-year, multiple-award, indefinite-delivery/indefinite-quantity master contract with a combined maximum value of $10 billion."
What it means for Intuitive Machines stock
All eight companies will compete for specific task orders, and no one winner is likely to scoop up the entire $10 billion. But even if Intuitive Machines wins no more than a 1/8 proportion of all the funds on offer, that would be $1.25 billion -- 155% more money than the company collected from all its various divisions working on all its various projects over the past year.
So this is potentially a very big deal for Intuitive Machines, albeit it's not guaranteed to be so.
Indeed, it could be even bigger than NASA's press release lets on. In its own announcement of its inclusion in the award, Intuitive Machines notes that if options are exercised on the contract, the $10 billion available could grow to $15 billion over another five years.
As one of only two space companies to have successfully landed a spacecraft on the moon, Intuitive Machines is well positioned to capitalize on this contract.
Rich Smith has positions in Intuitive Machines. The Motley Fool has positions in and recommends Firefly Aerospace, Intuitive Machines, Lockheed Martin, Northrop Grumman, and Space Exploration Technologies. The Motley Fool recommends Voyager Technologies. The Motley Fool has a disclosure policy.