LLAP - Terran Orbital soars over 85% on 'huge' new satellite deal

Terran Orbital ( NYSE: LLAP ) stock surged over 80% on Wednesday after the announcement of a new contract that dwarfs the company’s current market cap.

The new $2.4B contract awarded to Terran subsidiary Tyvak Nano-Satellite Systems is worth more than 10 times Terran’s market cap as of Tuesday’s close and more than 10 times the company’s $198M backlog prior to the deal. Per the terms, the subsidiary will be contracted to design, build, and deploy 288 low-earth orbit satellites for Rivada Space Networks in addition to 12 spare satellites.

Canaccord Genuity analyst Austin Moeller emphasized the importance of the deal in a note to clients on Wednesday.

“Today’s huge satellite production contract further substantiates our view that industrial-scale production of smallsats will be in high demand over the next decade,” he wrote. “In 2022, 2,303 total smallsats were launched into orbit, which was up 32% y/y. We now estimate that 13,575 smallsats could be launched in 2033.”

He advised that Terran Global’s ( LLAP ) first-mover advantage should serve it well as demand increases over time. It also places Terran “at the forefront of customer bids seeking to produce very large constellations” in the near term. Moeller reiterated a Buy rating and a $15 price target, suggesting the stock could soar another nearly 500% even after Wednesday’s pop.

Terran Global ( LLAP ) rocketed 85.88% higher in afternoon trading, retreating slightly from an over 100% gain at the intraday high.

Read more on the details of the new deal .

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