Today witnessed a substantial surge of 24% in Satellogic's stock price.
Today witnessed a substantial surge of 24% in Satellogic's stock price.
At Our Website, I frequently discuss numerous space stocks. However, a space stock I haven't delved into much is Uruguay-originated Satellogic (SATL with a 26.18% surge), which is swiftly approaching the completion of a 90-satellite constellation to offer high-definition satellite imagery to Earth-bound clients.
However, it's challenging to ignore Satellogic stock today as it skyrockets 23.5% by 12:05 p.m. ET following a contract announcement.
Satellogic's groundbreaking announcement
Earlier today, Satellogic disclosed an increase in the volume of satellite data it delivers to SynMax, a satellite data analytics firm. This data will aid hedge funds and financial analysts observing global oil and gas production. In their statement, Satellogic revealed they will supply data covering over 100 wellheads in North America. SynMax will subsequently utilize machine learning toprocess this data, generating insights to facilitate analysts in estimating oil and gas production levels at these sites to forecast global oil supplies and pricing data.
Curiously, Satellogic didn't specify the financial impact this contract will incur, whether in terms of revenue or profit margin. This points toward its potential insignificance to its business operations.
Should you invest in Satellogic stock?
This scarcity of positive financial performance might pose an issue for potential investors. Despite today's significant rally, appreciating Satellogic's stock price, this is a company that would benefit significantly from improved profitability. Over the last 12 months, Satellogic has amassed more than $64 million in net losses and approx. $55 million in negative free cash flow. Given a cash reserve of only $26 million, Satellogic's financial instability suggests they may run out of cash by the end of the next six months.
In an attempt to remedy its financial situation, Satellogic announced the sale of $10 million in new shares to an unidentified buyer. Regrettably, this infusion of capital only extends operational funds for about two more months. Until Satellogic can generate a profit, I regret to inform you that the stock appears to remain a risky investment option.
Considering Satellogic's recent contract with SynMax, which involves supplying satellite data for analyzing global oil and gas production, this could potentially open up opportunities for investment in the finance sector, particularly for those interested in the energy market. However, it's important to note the company's significant financial losses and negative cash flow, which may pose risks for potential investors.