Up More Than 30% in the Past Month, is Spire Global Still a Buy? Shares of the leading global space-based data and analytics provider Spire Global (SPIR) soared 33.7% over the past month thanks to its strategic collaborations and acquisition plans to accelerate its...

Shares of the leading global space-based data and analytics provider Spire Global (SPIR) soared 33.7% over the past month thanks to its strategic collaborations and acquisition plans to accelerate its growth. Given the substantial rise in its additional recurring revenue and pipeline growth, can the stock maintain its rally? Let's find out.

Space-to-cloud data and analytics company Spire Global, Inc. (SPIR) offers space-based data and services worldwide by leveraging its proprietary satellite technology to track maritime, aviation, and weather patterns. On August 17, the leading space data company began trading on NYSE after closing its merger with special purpose acquisition company NavSight. Over the past month, the stock has surged 33.7%, primarily driven by its strategic partnership to launch a mission to exhibit blockchain technology computation possibilities in space.

Analysts expect SPIR's revenues to increase 81% year-over-year to $73.59 million in fiscal 2022. The company's EPS is expected to rise 35.1% from the year-ago value next year.

Furthermore, the company has teamed up with Myriota to help expand its global satellite constellation through its space services capabilities. Moreover, its recent decision to acquire exactEarth Ltd, a global maritime vessel data provider, should enable SPIR to establish itself as a worldwide leader in the space-based maritime data industry. As the company continues to focus on expanding and adding new technological capabilities, it is well-positioned to maintain its growth and deliver solid returns.

Here's what we think could influence SPIR's performance in the upcoming months:

Strategic Partnerships

On September 28, SPIR announced a collaboration with SpaceChain, a leading space-as-a-service solutions provider, to launch a mission to demonstrate the feasibility of blockchain technology computation in space by maximizing data security. This industry-leading approach should enable SPIR to leverage satellite-based computing and realize the full potential for decentralized blockchains.

Also, last month, the company partnered up with a leading provider of low-cost and long battery life satellite connectivity for the Internet of Things (IoT), Myriota, to help expand Myriota Network using Spire low-earth orbit nanosatellites. SPIR's innovative satellite and Space-as-a-Service capabilities should allow its partners to deploy, operate, and scale custom applications while improving latency.

Acquisition Can Expand Footprint

Last month, SPIR entered into a definitive agreement to acquire exactEarth Ltd for roughly $161.2 million in cash and stock. After the completion of the acquisition, exactEarth would become a wholly-owned subsidiary of SPIR and operate from Canada, thereby accelerating the company's existing maritime business with data solutions and expansion of its geographic footprint. Moreover, the combined business aims to offer customers innovative solutions that drive the digitalization of the almost $2 trillion global maritime industry.

Impressive Financial Performance

For the six months ended June 30, 2021, SPIR's revenue was in the range of $18.6 million and $19.0 million, representing an increase of 33% to 35% from the prior-year period. The company's gross profit stood in the range of $11.2 million to $12.0 million, an increase of between 30% and 39% from the six months ended June 30, 2020. Moreover, its ARR was roughly $36.6 million as of June 30, 2021, up 37% from ARR as of June 30, 2020

Consensus Rating and Price Target Indicate Potential Upside

The stock has a consensus rating of "Overweight.' The consensus price target of $16 represents a 27.7% potential upside from yesterday's closing price of $12.53.

Bottom Line

SPIR's stock has gained 25.2% year-to-date thanks to its strategic partnerships to strengthen its position in the space services industry. Furthermore, its significant increase in ARR solution customers growth in the last reported quarter and continued geographical expansion should position it uniquely to benefit. So, we think it could be wise to bet in the stock now.

SPIR shares were trading at $7.10 per share on Friday afternoon, down $5.43 (-43.34%). Year-to-date, SPIR has declined -29.07%, versus a 16.46% rise in the benchmark S&P 500 index during the same period.

About the Author: Imon Ghosh

Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization.

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