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These 4 ETFs Provide Smart Exposure To Intuitive Machines, The New Space Economy

Benzinga·03/21/2025 18:08:11
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The space economy is seeing an influx of investment and innovation.

Intuitive Machines (NASDAQ:LUNR) expects to release its fourth-quarter 2024 earnings on March 24 before the market opens. The robust top-line expansion of its lunar payload services and NASA contracts make it a prime stock in the growing space exploration space as well as the aerospace and defense sector.

Intuitive Machines’ forward 12-month price-to-sales (P/S) of 3.17X is above the peer group average of 2.32x, reflecting a premium valuation. This implies that investors are paying a premium price relative to anticipated sales growth compared to peers.

Also Read: Space ETFs Rocked By Intuitive Machines’ Lunar Mishap — Is There A Safer Bet?

That said, Intuitive Machines is a volatile stock, as understood from its high Beta of 1.31, per CNBC. Beta of 1 and above means the stock tends to move more reactive to developments than the market in in general. For interested investors seeking exposure to the sector but without much of the involved risks, ETFs provide diversified exposure to the sectors.

This article examines the central themes regarding Intuitive Machines and identifies pertinent ETFs offering exposure to the space economy and the aerospace and defense sector.

The business of Intutive Machines is based on lunar missions and sophisticated space technologies. The contracts of the company with NASA, such as being part of the IM-1, IM-2, and IM-3 lunar payload missions, reflect its promise in the commercial space segment.

Pertinent ETFs

  • Procure Space ETF (NASDAQ:UFO): Tracks the S-Network Space Index, including space-related companies including Intuitive Machines. It’s expense ratio is 0.94%.
  • ARK Space Exploration & Innovation ETF (BATS:ARKX): Although it does not carry LUNR in its holdings, this fund actively invests in the companies pioneering space exploration and innovation, like Iridium Satellite (NASDAQ:IRDM) and Rocket Lab Usa Inc (NASDAQ:RKLB). It carries an expense ratio of 0.75%.
  • iShares U.S. Aerospace & Defense ETF (BATS:ITA): Follows the Dow Jones U.S. Aerospace & Defense Index, and carries an expense ratio of 0.4%. ITA’s portfolio is significantly skewed toward well-known aerospace and defense companies, in contrast to space-focused funds that contain speculative stocks like LUNR, which has NASA and Near Space Network contracts. More than 40% of the fund’s total assets are held by its top three holdings, which are GE Aerospace (NYSE:GE), RTX Corp. (NYSE:RTX), and Lockheed Martin Corp. (NYSE:LMT). ITA has been able to perform well during market turbulence thanks to this defensive allocation.
  • SPDR S&P Aerospace & Defense ETF (NYSE:XAR): Follows the S&P Aerospace & Defense Select Industry Index, and has an expense ratio of 0.35%. Since LUNR has been growing its aerospace and defense contract business, there is a possibility of XAR including LUNR in its portfolio in one of its coming reallocations.

With the space economy growing, Intuitive Machines’ growth highlights the growing overlap of space exploration, defense, and cutting-edge technology.

With LUNR’s participation in lunar missions and advanced innovations, the firm is an appealing investment opportunity for investors. Nonetheless, due to its high valuation, investors would need to evaluate their risk tolerance and look at diversified ETF approaches that offer exposure to the general space and defense sectors. Through the use of ETFs, investors are able to ride this dynamic and fast-growing sector while controlling risk.

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