Sometimes a stock falls so far, so fast that the only thing left to do is bounce. That's roughly the story with Intuitive Machines Inc. (LUNR), which climbed about 5% in Friday's premarket trading as investors eyed oversold technical conditions ahead of the company's Nov. 12 earnings report.
The broader tape helped. Nasdaq futures gained 1.51%, while S&P 500 futures rose 0.12%, giving the market a friendlier backdrop than the one space and defense investors woke up to on Thursday.
Intuitive Machines had been sliding for a while, and the decline pushed the stock near its 52-week low. Friday's move is a recovery, but a modest one, and it arrives just ahead of next week's earnings report, which could offer fresh insight into the space infrastructure company's growth prospects.
Why Defense Stocks Took A Hit
Defense and aerospace stocks faced selling pressure Thursday following Democratic victories in the midterm elections. Investors raised concerns that a Democrat-controlled Congress could challenge President Donald Trump's proposed $1.5 trillion defense budget, creating uncertainty around Pentagon spending and government contracts, according to market data.
For a company like Intuitive Machines, which lives at the intersection of space infrastructure and government contracts, that kind of political uncertainty matters. It's not that the contracts disappear overnight. It's that the market hates not knowing, and it prices that uncertainty in quickly.
The Technical Picture: Oversold, But Still Bruised
Here's the thing about Friday's rebound: it doesn't erase the damage. Intuitive Machines remains below its major moving averages, signaling continued weakness despite the bounce.
The stock trades 17.1% below its 20-day simple moving average (SMA) of $10.98 and 31.5% below its 50-day SMA of $13.29. It also sits 39.6% below its 100-day SMA of $15.07 and 53.5% below its 200-day SMA of $19.55.
In other words, the long-term trend is still pointed down. The relative strength index (RSI) stands at 29.17, which indicates oversold conditions. But an oversold reading is a description, not a promise. It does not guarantee a sustained recovery.
The stock's 52-week range spans $7.78 to $46.75, with $8 emerging as a key support level. That's the line to watch if the bounce fades.
What To Expect From The Nov. 12 Earnings Report
Intuitive Machines is scheduled to report earnings Nov. 12. Analysts expect a loss of 12 cents per share, compared with a loss of 6 cents a year earlier. So the loss is expected to widen.
Revenue, though, is projected to reach $245.88 million, up from $52.44 million a year ago. That's a massive jump, and it's the number that matters most here. If the company delivers on that kind of top-line growth, the widening loss looks a lot more like investment than deterioration.
The stock carries a consensus Buy rating, with an average price forecast of $35.88 across 13 analysts. That's a long way from Friday's premarket price, which tells you how much optimism is still baked into the sell-side view.
Recent moves from individual analysts have been more cautious. B. Riley Securities recently lowered its price forecast to $34, while KeyBanc cut its forecast to $30. Macquarie initiated coverage with an Outperform rating and a $25 forecast.
How To Own It Without Buying The Stock
For investors who want space and defense exposure without picking a single name, Intuitive Machines shows up in a few ETFs. It accounts for 5.56% of the Defiance Drone and Modern Warfare ETF (JEDI), 3.58% of the Global X Space Tech ETF (ORBX) and 3.11% of the WisdomTree Space Economy Fund ETF (WSPC).
Where The Stock Stands Now
Intuitive Machines shares gained 4.99% to $9.05 in Friday's premarket trading, according to market data.
So the stock is bouncing, the RSI is screaming oversold, and earnings are six days away. That's a recipe for volatility either way. The bulls will point to the revenue growth and the Buy rating. The bears will point to the moving averages and the widening loss. Both have a case, and by next Thursday, the market will pick a winner.
