This high-flying IPO is taking pictures for the moon.
On Aug. 6, Firefly Aerospace (FLY -1.39%) had its preliminary public providing (IPO) at $45 per share. As of this writing, Firefly inventory is already over $50 per share, as traders are desirous to get their arms on shares of the primary absolutely profitable non-public firm to land on the moon.
At its present share value, Firefly Aerospace is valued at roughly $7.4 billion. This places the area inventory into the highest 10 most beneficial IPO shares of 2025. However is it already overvalued right here in the beginning? The reply will not be as cut-and-dried as traders hope.
Picture supply: Getty Photos.
How does Firefly generate profits?
It is normally a nasty concept to begin by desirous about a inventory’s valuation. A greater concept could be to measurement up a enterprise’s high quality and future alternative. Low-quality corporations with bleak outlooks probably will not be good investments, no matter valuation.
For its half, Firefly generates income from launching rockets for its clients, and it additionally generates income from moon landings. In keeping with the corporate, its addressable market for launching rockets might hit $32 billion in 2035, and its addressable marketplace for moon landings might hit $9 billion in 2030. This provides traders a ballpark concept of how a lot spending it hopes to seize within the coming years.
As of the tip of the primary quarter of 2025, Firefly had trailing-12-month income of $108 million. And it had a backlog of $1.1 billion, which was up 100% from the primary quarter of 2024. So, it clearly has room to develop from right here.
Firefly’s Q1 income of $56 million was up a staggering 572% 12 months over 12 months. However remember the fact that the corporate landed on the moon throughout the quarter. That does not occur typically, however there is a massive payday when it does.
Is Firefly inventory overvalued?
Unquestionably, Firefly inventory appears overvalued for quite a lot of causes.
First, take into account Firefly’s lumpy income development. It solely grew by 10% in 2024 in comparison with 572% development in Q1, making it arduous to approximate a real development charge. Furthermore, Firefly inventory has a sky-high price-to-sales (P/S) ratio of greater than 70. Examine that to fellow area inventory Rocket Lab, which trades at a P/S ratio of 48, which continues to be fairly dear as effectively, however far cheaper.
Firefly inventory has surged due to a dynamic that many latest IPO shares have. The corporate has almost 147 million excellent shares, but it surely solely supplied about 19 million. Which means that there is a comparatively small provide of shares out there for buying and selling, however there’s excessive investor demand for area shares. The imbalance naturally pushes valuations larger.
Firefly inventory is dear, but it surely’s nonetheless value contemplating for its future enterprise alternatives.
Might Firefly inventory be funding anyway?
Privately held SpaceX grew to become one of the crucial priceless corporations on the earth by pioneering reusable rockets, which helped decrease prices. Firefly is growing its personal reusable rocket in partnership with Northrop Grumman. As one of many largest protection contractors on the earth, this can be a good companion, probably guaranteeing that the mission will cross the end line.
Proper now, Firefly operates at a gross loss. Due to this fact, something the corporate can do to decrease prices might make a fabric distinction to enterprise outcomes.
Another excuse to have optimism with Firefly is that its high clients embrace the U.S. House Pressure, Lockheed Martin, and NASA. These are demanding clients, to make certain. However they’re additionally deep-pocketed if Firefly can reliably ship on its guarantees.
With an organization akin to Firefly Aerospace — comparatively unproven and with a nonetheless small income base — its valuation will not derail the funding thesis. On the contrary, will probably be the corporate’s execution.
To be clear, Firefly Aerospace has had launch failures in its historical past. The corporate’s huge backlog is encouraging. However that is not cash within the financial institution — there are termination rights. Ongoing failures might trigger clients to cancel contracts.
If Firefly Aerospace can constantly launch with out failure and drive down prices, then it’ll probably win extra enterprise on this rising area. This could dramatically change the monetary profile of the enterprise. Valuing the inventory in the present day is sort of unimaginable for that reason.
That stated, I’ll throw out one cautionary thought in closing: The area trade is slow-moving though the headlines are thrilling. For instance, NASA just lately introduced plans to place a nuclear reactor on the moon, accelerating plans for a everlasting base. However even with the accelerated timeline, the company is concentrating on a 2030 launch.
This instance highlights that even when issues are going effectively, Firefly Aerospace might must endure losses for a while but as a result of it merely takes time to develop plans for outer area. For that reason, I will patiently wait on the sidelines for the foreseeable future with this one.
