BlackSky Technology (BKSY) has signed multiple Gen 3 expansion contracts as early access pilot programs move into renewal deals, highlighting continuing customer uptake for its AI-enabled, space-based intelligence services across several regions.

The new Gen 3 renewal contracts arrive at a time when momentum in BlackSky Technology’s shares has been building, with a 30 day share price return of 42.18% and a year to date share price return of 31.46%. The 1 year total shareholder return of 126.39% and 3 year total shareholder return of 97.76% contrast with a 5 year total shareholder return that remains 67.57% lower.

If this kind of AI driven space data story has your attention, it could be worth widening your radar to high growth tech and AI stocks for other potential ideas in the sector.

With Gen 3 renewals building and the share price already up sharply over the past year, the key question now is whether BlackSky is still trading at a discount or if the market is already pricing in future growth.

Most Popular Narrative: 30% Overvalued

Compared to BlackSky Technology’s last close at US$27.37, the most followed narrative points to a fair value of about US$27.29, implying the current price sits slightly above that estimate while still leaning on robust growth assumptions.

The accelerated development of the Arrow Constellation targets a new market segment (large-scale, wide-area mapping and monitoring) and is timed to address a forecasted global supply gap starting in 2027, potentially unlocking a major new revenue stream and diversifying BlackSky's long-term earnings profile.

Curious what kind of revenue ramp, margin shift, and future earnings multiple are baked into that fair value figure, and how they connect to those satellites and software contracts? The narrative spells out a detailed growth path that ties together recurring imagery revenues, analytics adoption, and a premium valuation multiple usually reserved for higher profile names.

Result: Fair Value of $27.29 (OVERVALUED)

However, there are still pressure points here, including heavy capital needs for Gen 3 and Arrow, as well as Gen 3 trial contracts that may not convert as expected.

Another View: SWS DCF Points to Deep Discount

Set against the narrative fair value of about US$27.29, our DCF model paints a very different picture. On that framework, BlackSky at US$27.37 is trading around 63.9% below an estimated fair value of US$75.72. This frames the current price as heavily discounted rather than slightly overvalued. The tension for you is simple: which set of assumptions do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out BlackSky Technology for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 872 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own BlackSky Technology Narrative

If you want to stress test these assumptions yourself, you can review the numbers, tweak the inputs, and shape a custom view in minutes: Do it your way.

A great starting point for your BlackSky Technology research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If BlackSky has you thinking bigger about your portfolio, do not stop here. Widen your search with focused screeners built to surface clear, data backed ideas.

• Hunt for potential turnaround names by scanning these 3528 penny stocks with strong financials that already show stronger financial footing than many expect at lower price points.
• Lean into the AI theme with these 24 AI penny stocks and zero in on smaller names connected to machine learning and automation that might not yet be widely followed.
• Seek out value focused ideas through these 872 undervalued stocks based on cash flows where pricing is assessed against underlying cash flows instead of headline stories.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.