BlackSky Technology (BKSY) has brought its fourth Gen-3 satellite online in under a week, making daily 35-centimeter imagery and AI-enabled analytics broadly accessible through its Spectra platform for government and commercial customers.

The latest Gen-3 milestones come after a strong run in the shares, with a 34.87% 90 day share price return and a very large 1 year total shareholder return of 160.24%. This hints that momentum has picked up recently despite earlier weakness over 5 years.

If BlackSky’s satellite news has you thinking about where else AI is reshaping real world infrastructure, now could be a good time to scan 35 AI infrastructure stocks for fresh ideas.

With the shares up 34.87% over 90 days and a very large 1 year total return against ongoing losses and an intrinsic discount of about 50%, is BlackSky still mispriced, or is the market already banking on future growth?

Most Popular Narrative: 13.4% Undervalued

At $23.63, the most followed narrative puts BlackSky’s fair value at $27.29, suggesting some upside baked into expectations for its satellites and Spectra platform.

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). This is likely to drive a step-function increase in recurring imagery and analytics revenues in 2025 and beyond.

Want to see what is behind that projected step change in revenue and margins? The narrative describes ambitious growth, improving profitability, and a rich future earnings multiple. Curious which assumptions link today’s loss making profile to that fair value number?

Result: Fair Value of $27.29 (UNDERVALUED)

However, this upbeat story still runs into real hurdles, including heavy reliance on government and international contracts, as well as capital hungry satellite projects that could pressure dilution and margins.

Another Angle on Valuation

The narrative leans on future earnings to argue BlackSky is 13.4% undervalued, but the current P/S ratio tells a different story. At about 8x sales, BlackSky is priced far above the US Professional Services industry at 0.9x and the peer average at 1.6x. Our fair ratio sits at 3.2x. That gap suggests investors are paying a heavy premium today. How comfortable are you with that trade off?

Next Steps

If this mix of optimism and concern feels familiar, do not wait around for the crowd to decide what it means for you. Instead, check out the 2 key rewards and 3 important warning signs and weigh the full picture for yourself.

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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.