Key Points

BlackSky posted strong revenue growth in the quarter and boasted a much larger backlog of future contracts. The company is still early stage and not profitable, making it best suited for investors with a high tolerance for risk. 10 stocks we like better than BlackSky Technology ›

Satellite-imagery specialist BlackSky Technology (NYSE: BKSY) reported better-than-expected quarterly results and kept its full-year guidance intact. Investors are relieved, sending the company's stock up 25%, as of 11:30 a.m. ET.

A growing backlog of future business

BlackSky provides high-resolution imagery, analytics, and monitoring services via a fleet of satellites to government and commercial customers. The company lost $0.42 per share in the first quarter on revenue of $29.5 million, topping Wall Street's estimate of a $0.46 per-share loss on $27 million in sales.Image source: Getty Images.

Revenue was up 22% year over year, and BlackSky booked more than $130 million in new contracts. The overall backlog grew by $104 million in the quarter, or 40%, and now represents $366 million in future business.

Investors are seeing strong demand, driven by new mission applications that are enabled by the combination of very-high resolution imagery, high-frequency monitoring, and [artificial intelligence] AI-enabled insights," CEO Brian E. O'Toole said in a statement. "We're on track to begin providing early access to major customers and commence general commercial availability later this year."

The company also said it expects $125 million to $142 million in revenue for the full year, in line with the $132.4 million consensus estimate.

Is BlackSky stock a buy?

BlackSky is in the early stages of its development, so when earnings season comes along, investors mostly just want to see signs that the company remains on track. They got that and more in this quarter, as the growth in future business is an indication that customers see the potential in what BlackSky is offering.

However, some caution is warranted. Space stocks are volatile by nature, and with the stock valued at more than 2x revenue, one could argue that some of that future growth is already priced in. But for those investors with a high risk tolerance, BlackSky could be an attractive candidate for a well-diversified portfolio.

Should you invest $1,000 in BlackSky Technology right now?

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why BlackSky Stock Is Rocketing Higher Today was originally published by The Motley Fool

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