Intuitive Machines Misses Big on Earnings. Stifel Upgrades It Anyway

Intuitive Machines, a space infrastructure company, missed its earnings expectations in its latest quarterly report, filing a loss of $0.29 per share compared to the predicted $0.09 loss. Shares of the company fell by as much as 13% on August 13, as it released the disappointing earnings. Revenue for the quarter was $206.2 million, nearly quadrupling from the previous year's $50.3 million, but it still fell short of the $224 million consensus.

Adjusted EBITDA came in at a $13.8 million loss, while forecasts had predicted a $2.8 million profit.

Despite the earnings miss, Stifel upgraded Intuitive Machines to a Buy rating from Hold and lowered its price objective to $26 from $32. The firm's justification for the upgrade was based on the company's order book, which increased by $707 million during the quarter, reaching $1.76 billion. Over $600 million of this increase came from three commercial geostationary satellite agreements and a July deal covering 18 spacecraft for the Golden Dome missile-defense network.

This diversification into commercial satellites and the Golden Dome reduces the company's dependence on lunar lander missions.

CEO Steve Altemus remained confident in the company's guidance, highlighting the positive aspects of the quarter, such as revenue more than four times higher than the previous year, exceptional bookings, and a backlog that positions the company for its next growth phase. Stifel reiterated the full-year revenue range for 2026 of $900 million to $1 billion and its expectation for positive adjusted EBITDA.

Institutional sentiment remained resilient, with hedge fund holdings increasing from 28 in Q4 to 30 in Q1 and 32 in Q2. However, short interest stood at a high 25.46% of the float, indicating concerns about execution and contract profitability. The company's strong backlog, with a 4.5x book-to-bill ratio and a significantly larger order book post-2025, suggests rising demand.

Stifel's reassurance that the EBITDA shortfall was a discrete, explainable adjustment rather than a consistent problem further supports the core trend of the company's growth.

However, the magnitude of this quarter's loss due to cost overruns on the IM-4 lunar lander program raises concerns about whether similar adjustments may arise when the company develops a much larger backlog. While the increasing growth in revenue is promising, it still falls short of expectations, indicating that bookings are exceeding the company's ability to turn them into recognized revenue on time.

The short interest rate of 25.46% also highlights the uncertainty surrounding profitability and execution difficulties, suggesting that transforming a massive backlog into consistent, profitable delivery is a different challenge than simply securing contracts.

Investors should view this case as a situation where high demand is colliding with uncertain execution. Although the backlog increase is substantial and diverse, supporting Stifel's case, the magnitude of this quarter's lapse means that the next few quarters are of greater importance than usual. Current shareholders may find it justifiable to maintain their position given the order book and reaffirmed guidance, while new investors may seek confirmation that the IM-4 cost overrun was a one-time event rather than an early sign of broader margin pressure as the company navigates its growing backlog.