This satellite stock could double as analysts say it's 'built for the space megatrend'

By William Gavin York Space Systems shares have slid since the company debuted in January, but some analysts think the company has technological and financial advantages over rivals York Space Systems was founded in 2012 and develops and operates satellites and spacecraft for customers - namely the U.S. government. The last few weeks have been rough for newly public York Space Systems. But some analysts see plenty of room for the company to become a space-industry titan - and for its stock to surge. York (YSS) debuted on the New York Stock Exchange on Jan. 29 at $38 per share after selling 18.5 million shares at $34 per share in an upsized initial public offering. But the stock fell almost 32% through Friday, closing at $25.91 per share. That presents an opportunity, according to analysts at Citi led by John Godyn, who initiated coverage on York with a buy rating and a $37 price target, implying 39% upside from current trading levels. On Monday, the stock nudged up 2% in intraday trading. The company is "built for the space megatrend," according to Godyn, who pointed to growing interest and investment in the global so-called space economy. A key part of that is York's efforts to vertically integrate many aspects of its business, including its ability to make key components of its satellites in-house. "York's satellite architecture is built for flexibility, scaled production, and is designed to drive significant cost efficiencies," Godyn wrote, adding that its backward-compatible design approach allows the company to streamline production and keep costs down. York says it builds its satellites for about half the cost of what rival manufacturers spend. However, the company has yet to turn a profit and reported a net loss of $56 million over the first nine months of 2025. In a securities filing, York warned that it expects to "incur net losses for the next several years." Read: York Space tests the market's hunger for satellite stocks as it upsizes its IPO Despite that, Raymond James analyst Brian Gesuale said Monday that he expects York to become profitable this year, citing its potential to earn government satellite contracts. The analyst initiated coverage of shares with an outperform rating and a $55 price target, implying upside of 107%. York has said that "substantially all" of its $280.9 million in sales and its backlog over the first three quarters of last year can be attributed to the U.S. Space Development Agency. The company contributed 21 satellites for the transport layer of the agency's Proliferated Warfighter Space Architecture program. It's secured 35% of the current total of satellite awards for the transport layer, more than any other company, according to analysts. See: This satellite maker's stock is soaring. Here's why it can still rally a lot more. J.P. Morgan sees room for York to expand beyond its work for the SDA, namely contracts with the intelligence community and for the Golden Dome missile-defense program. The bank said that York estimates that around half of its $140 billion total addressable market is attributable to the Golden Dome, while 30% can be traced to work for intelligence agencies. J.P. Morgan initiated coverage of York's stock with an overweight rating and $39 price target, arguing that the stock should trade at a premium to shares of Firefly Aerospace (FLY) and Voyager Technologies (VOYG), given its "relatively faster" path to profitability. They also see it trading at a "meaningful" premium to Intuitive Machines (LUNR) and Redwire (RDW). However, not everyone is as optimistic. Goldman Sachs on Monday began covering York with a neutral rating and a $29-per-share price target, implying 9% upside from current trading levels. Truist analyst Michael Ciarmoli initiated coverage of the stock with a hold rating and $30 price target, criticizing its reliance on the SDA. Ciarmoli noted that York's backlog has fallen for two straight years - down 31.6% since the end of 2023. Ciarmoli warned that the Pentagon has put some elements of the Proliferated Warfighter Space Architecture program on hold while it explores shifting responsibility outside of the SDA. The government is also reviewing plans to shift future tranches of the transport layer to exclusively SpaceX and its Starshield, a version of its Starlink satellites designed for national security purposes, he added. "In the near term we believe SpaceX could be the most disruptive force in the satellite market," the Truist analyst said of Elon Musk's rocket-launch company, which is expected to conduct its own public offering in the summer. Read: You can invest in SpaceX before its IPO - but should you? -William Gavin This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 02-23-26 1148ET