Intuitive Machines, Inc. (NASDAQ:LUNR) SELL on all three horizons
At $19.01 the shares trade at 4.56× sales against a warranted 1.28×, and four hard gates now fire on their literal text.
Intuitive Machines is the only company to have soft-landed a commercial spacecraft on the Moon twice. Acquisitions took quarterly revenue from $50m to $206m. It has never made an operating profit.
The call worked
Start with the win, because it is real and it belongs at the top. On the fourth of August we rated Intuitive Machines short hold, medium buy and long strong buy at fourteen dollars twenty. The shares are now nineteen dollars and one cent — up thirty-three point nine percent in twelve days. The quarter underneath that move was the best in the company's history: revenue of two hundred and six point two million, more than four times the same quarter last year, backlog of one point seven six billion against two hundred and thirteen million at the end of last year, a sixth lunar payload award, two NASA prime contracts, and national-security work rising from three percent of the mix to thirty.
National-security revenue 3% to 30% of the mix in a year · FY2026 guidance $900m–$1.0bn with positive Adjusted EBITDA
Why the gain is the reason to sell
That gain is not incidental to the downgrade; it is most of the reason for it. Run the anchor properly and the shares trade at four point five six times sales against a warranted one point two eight — a ratio of three point five six, squarely in the Expensive band. Weight the three twelve-month paths and you get sixteen dollars seventy-three, twelve percent below the close. A negative expected value on a medium-quality business at an expensive price is the arithmetic behind a sell at every horizon. Note what this is not: it is a judgement about a price, not a verdict on the company.
Base case $14.50 sits below the $19.01 close · Bear $9.00 at 30% — the second most likely single path
We had the enterprise value wrong
Now our own mistake, stated plainly. Our prior three reports computed enterprise value to sales on the Class A float alone and ignored the Class C shares — about twenty-four percent of the economic equity. They also recorded the warranted-multiple anchor as not available while still publishing an attractive valuation band, which is a band with nothing behind it. Corrected and run properly, the fourth of August multiple was three point five times, not the two point six we published. So part of this downgrade is the price rising, and part of it is us measuring correctly for the first time. Both belong in the record.
Class C shares were excluded from enterprise value
What the Q2 filing disclosed
The second-quarter filing disclosed three things our earlier reports had missed. Strip out the acquired Lanteris revenue and the legacy service business shrank twenty-seven percent year on year. The filing also states that the next two flagship missions are both loss contracts, with a further twenty-two and a half million of losses booked on them in the first half — a company that cannot price its flagship product above cost does not have the pricing power we credited it with. And four hard gates now fire: trailing interest coverage of minus ten point zero three, Class A shares up thirty-nine point eight percent in six months, an imminent unflown landing with no timing window, and the valuation ceiling. We have not written any of them an exemption.
Interest coverage −10.03× fires the distress gate
What could go wrong
The case against selling is genuine and worth putting loudly. The bull path is thirty dollars at twenty-five percent, and it needs one thing above all: the next lander comes to rest upright and operates a full surface mission. That would repair the single thing this company is judged on, and it would convert the geostationary programme from an authority to proceed into funded backlog. The tape agrees with the bulls right now — the shares are up forty point six percent in a month and have reclaimed the fifty-day average, so this is a sell into strength, not into weakness. The backlog and the diversification into national security are real, not accounting. And a sell that is right about value can be wrong about timing for a long while; we were on the other side of exactly that trade twelve days ago.
Risk vs Reward
Bull thirty dollars at twenty-five percent, on a clean landing and the geostationary programme converting. Base fourteen fifty at forty-five percent — note that the central case sits below today's price, because it has guidance being met while the multiple normalises anyway. Bear nine dollars at thirty percent, on a third consecutive landing anomaly, a missed profit guide and the remaining at-the-market capacity drawn at a falling price. At thirty percent the bear is not a tail; it is the second most likely single path. The weighted outcome is sixteen seventy-three, twelve percent below the close.
The verdict
Sell, on all three horizons, and the Donatien Pick is stopped. With no buy at any horizon the operator's conviction holding moves to stopped — it stays visible on the watchlist rather than being quietly removed, and it reactivates automatically the moment a later report produces a buy anywhere. A triggered distress gate is a catastrophic thesis-invalidation item, which is why the exit action reads exit rather than trim. Selling here banks a re-rating the framework does not think the fundamentals have earned. The previous call worked. This one says the price has run past the business, and those two statements are both true at the same time.
This report is refreshed on the thirtieth of August. It is a quantitative framework for educational purposes only, and it is not financial advice. Always do your own research.
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