LLAP - B. Riley initiates Terran Orbital at 'Buy' eyes over 100% upside

B. Riley Securities analyst Mike Crawford assumed coverage of Terran Orbital Corporation ( NYSE: LLAP ) on Monday, advising clients that the stock could double in the next year.

Crawford explained that the company’s multi-billion dollar bid and proposal pipeline is not accounted for in the company’s current valuation that has been disproportionately impacted during a “nuclear winter” for de-SPAC names. The Tyvak manufacturing business specifically was cited as a “conduit to funding investment in a Gen 3.0 earth observation platform, PredaSAR”, which Crawford believes will become valuable to both government and commercial customers.

“We believe its Tyvak satellite manufacturing subsidiary alone might be worth $1.5B, particularly if we get a like data point with a potential York Space Systems transaction pursuant to that company’s reported strategic alternative process, leaving optionality on value of a PredaSAR constellation that at scale could potentially generate ~$2B in revenue and 50%+ EBITDA margins,” he wrote.

Crawford added that its competitive advantages, such as a Strategic Cooperation Agreement with Lockheed Martin ( LMT ), are being unduly discounted.

“We think this is no ordinary partnership and see LLAP as somewhat of a low-cost

force multiplier for Lockheed itself,” Crawford wrote. “As evidence, consider that LLAP, through its Tyvak subsidiary, is the sole vendor we know of linked directly to LMT's Website.”

Alongside a “Buy” rating, Crawford assigned a $10 price target to the stock, suggesting over 100% upside in the next year.

Wall Street consensus on the stock stands at a “Strong Buy” with a $13 average target price. SeekingAlpha’s Quant team, by contrast, is decidedly bearish on the stock .

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