BlackSky Technology (BKSY) is in focus after securing a competitive multi year Assured subscription contract worth US$25 million with a major international defense customer, centered on its Gen 3 imagery and AI analytics.

The new Assured contract lands after a volatile stretch for BlackSky, with a 30 day share price return of 44.5% and year to date share price return of 52.1%, while the 1 year total shareholder return is very large, pointing to strong momentum built over a longer period.

If this kind of contract win has your attention, it could be a good moment to see which other space and AI names are gaining traction through the 38 AI infrastructure stocks.

With BlackSky posting very large multi year returns and trading below an internal intrinsic value estimate but above the average analyst target, the key question is whether the latest defense win leaves meaningful upside or whether future growth is already priced in.

Most Popular Narrative: 14.6% Overvalued

The most followed narrative puts BlackSky’s fair value at $27.63 per share, below the last close at $31.66. This frames current enthusiasm against more measured expectations.

The ramp-up of the Gen-3 satellite constellation, coupled with demonstrated high performance and lower costs, is creating strong demand and contract expansion (especially once general availability launches in Q4) and is likely to drive a step-function increase in recurring imagery and analytics revenues in 2025 and beyond.

This narrative suggests a higher fair value than analyst targets by focusing on three elements: revenue expansion, margin shifts, and a relatively high future earnings multiple.

Result: Fair Value of $27.63 (OVERVALUED)

However, heavy dependence on government and international contracts, along with lumpier services revenue, means any slowdown in awards or project milestones could quickly challenge this upbeat narrative.

Another View: Cash Flows Point in the Opposite Direction

While the most popular narrative sees BlackSky as 14.6% overvalued at $31.66 versus a $27.63 fair value, the SWS DCF model points the other way, with an estimate of $47.02. That is a 32.7% gap in the opposite direction, so which story 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 53 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

The split verdict on value and sentiment makes this a good moment to move quickly. Review the numbers yourself, and weigh up 2 key rewards and 3 important warning signs

Looking for more investment ideas?

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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.