Satixfy Communications (NYSEAMERICAN:SATX) stock is a speculative growth play that appeared on the investing world’s radar recently.
Last month, shortly after the completion of the special purpose acquisition company (or SPAC) merger that took it public in late October, SATX stock experienced a tremendous run-up in price.
In fact, you can say, it went “too the moon,” skyrocketing from single-digit prices, to as much as $79.21 per share. Since then, however, this satellite communications systems stock has made a fast move back to earth.
Although still up substantially from pre-spike prices, Satixfy shares have dropped around 62% from their high-water mark. Still, don’t assume that means the opportunity here has come and gone.
It may take some time, but an even more incredible liftoff in price could play out for shares down the road. It’s not too late, if you’re only discovering this stock now.
SATX Stock at a Glance
Based in Israel, Satixfy Communications was founded in 2012. Although out of the pre-revenue stage, “early stage” is still an apt descriptor for this business. Over the past twelve months, the company has generated only $14.1 million in revenue.
However, a lack of high revenue didn’t stop SPAC Endurance Acquisition Corp. from selecting Satixfy as its merger partner earlier this year. Mainly, because while it has yet to take off revenue and earnings-wise in the past decade, the coming decade could play out a whole lot differently for this company.
Per the company’s SPAC merger presentation, Satixfy is well-positioned to benefit from the current and future growth of the satellite industry. In what it has called the “21st century’s next Gold Rush,” this provider of components such as semiconductors, user terminals and modems is “selling the picks and shovels.”
This could translate into incredible revenue growth over the next few years. Projections included in the investor presentation call for $374 million in revenue, and $113 million in EBITDA, by 2026. That’s a more than 26.5-fold jump in revenue, and a massive swing from moderate losses to high profitability.
How Satixfy Could Re-Enter High Orbit
Since its debut, SATX stock has been extremely volatile. At first tumbling in its first trading days, the stock experienced a massive run-up in price between Nov. 3 and Nov. 17. The reason for this is unclear.
However, it’s possible that the broad market rally that occurred during this timeframe played a role in SATX’s dramatic price moves. At the time, investor sentiment made a hard shift back to positive, as promising economic data encouraged many speculators to resume a “risk-on” stance.
As InvestorPlace’s Chris Macdonald discussed on Nov. 17, right before this tremendous price surge, SATX had a low trading volume. This may explain why the “risk-on” rally had such an outsized impact on this particular speculative growth play. Of course, as macro fears/uncertainties are again on the rise, enthusiasm for risky stocks has pulled back, and so too have SATX shares.
Again though, that doesn’t mean last month’s “to the moon” move for Satixfy was its last one. Considering current satellite industry trends, this company has a strong chance of delivering growth in line with the aforementioned projections. If this happens, shares could make a gradual return back to prior price levels.
Bottom Line on SATX Stock
Satixfy stock isn’t for everyone. Just like how it didn’t take much to send shares to materially-higher prices, it may not take much to push shares back down to single-digit prices.
Even if there’s little in the way of company-specific developments (good or bad), something like another broad market sell-off could be enough to send this recent “hot stock” back to single-digit prices.
That said, if you are looking for potential speculative positions to enter, while other market participants hide out in safe harbors, feel free to begin accumulating a position.
While scores of established and upstart satellite firms attempt to grab a large share of the market, this company’s “picks and shovels” strategy could pay off in a big way. Ahead of a possible relaunch of SATX stock back to higher prices, now may be the time to buy.
SATX stock earns a B rating in Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.