Firefly Aerospace IPO: The Hottest Market Debut of 2025—Or Just Another Overhyped Space Stock?

Rockets aren’t the only thing soaring—Firefly Aerospace’s IPO is blasting off with Wall Street’s hype engines at full throttle. But beneath the champagne-popping headlines, analysts whisper: 'Is this another case of gravity-defying valuation?'

The space race gets a new public contender. Private investors already poured fuel into Firefly’s tanks, betting big on its lunar landers and Alpha rockets. Now Main Street gets a ticket to ride—if they’re willing to stomach space-grade volatility.

Silicon Valley meets final frontier. Tech bros and aerospace veterans collide in a company promising to 'democratize access to space.' Cynics note that 'democratization' still starts at $XX per share—pocket change for hedge funds, play money for retail.

The billion-dollar question: Can Firefly deliver more than PowerPoint rockets? With competitors like SpaceX staying private, this IPO becomes the public market’s only seat at the space table. Just remember: For every moonshot that lands, a dozen craters await.

Closing thought: Nothing makes financiers believe in zero-gravity economics quite like a pre-revenue space stock. To the moon—or to the bag-holders' graveyard?

Image source: Getty Images.

How does Firefly make money?

It's usually a bad idea to start by thinking about a stock's valuation. A better idea WOULD be to size up a business's quality and future opportunity. Low-quality companies with bleak outlooks likely won't be good investments, regardless of valuation.

For its part, Firefly generates revenue from launching rockets for its customers, and it also generates revenue from moon landings. According to the company, its addressable market for launching rockets could hit $32 billion in 2035, and its addressable market for moon landings could hit $9 billion in 2030. This gives investors a ballpark idea of how much spending it hopes to capture in the coming years.

As of the end of the first quarter of 2025, Firefly had trailing-12-month revenue of $108 million. And it had a backlog of $1.1 billion, which was up 100% from the first quarter of 2024. So, it clearly has room to grow from here.

Firefly's Q1 revenue of $56 million was up a staggering 572% year over year. But keep in mind that the company landed on the moon during the quarter. That doesn't happen often, but there's a big payday when it does.

Is Firefly stock overvalued?

Without a doubt, Firefly stock looks overvalued for a variety of reasons.

First, consider Firefly's lumpy revenue growth. It only grew by 10% in 2024 compared to 572% growth in Q1, making it hard to approximate a true growth rate. Moreover, Firefly stock has a sky-high price-to-sales (P/S) ratio of more than 70. Compare that to fellow space stock, which trades at a P/S ratio of 48, which is still quite pricey as well, but far cheaper.

Firefly stock has surged because of a dynamic that many recent IPO stocks have. The company has nearly 147 million outstanding shares, but it only offered about 19 million. This means that there's a relatively small supply of shares available for trading, but there is high investor demand for space stocks. The imbalance naturally pushes valuations higher.

Firefly stock is expensive, but it's still worth considering for its future business opportunities.

Could Firefly stock be a good investment anyway?

Privately held SpaceX became one of the most valuable companies in the world by pioneering reusable rockets, which helped lower costs. Firefly is developing its own reusable rocket in partnership with. As one of the largest defense contractors in the world, this is a good partner, likely ensuring that the project will cross the finish line.

Right now, Firefly operates at a gross loss. Therefore, anything the company can do to lower costs could make a material difference to business results.

Another reason to have Optimism with Firefly is that its top customers include the U.S. Space Force,, and NASA. These are demanding customers, to be sure. But they're also deep-pocketed if Firefly can reliably deliver on its promises.

With a company such as Firefly Aerospace -- relatively unproven and with a still small revenue base -- its valuation won't derail the investment thesis. To the contrary, it will be the company's execution.

To be clear, Firefly Aerospace has had launch failures in its history. The company's massive backlog is encouraging. But that's not money in the bank -- there are termination rights. Ongoing failures could cause customers to cancel contracts.

If Firefly Aerospace can consistently launch without failure and drive down costs, then it will likely win more business in this growing space. This would dramatically change the financial profile of the business. Valuing the stock today is almost impossible for this reason.

That said, I will throw out one cautionary thought in closing: The space industry is slow-moving even though the headlines are exciting. For example, NASA recently announced plans to put a nuclear reactor on the moon, accelerating plans for a permanent base. But even with the accelerated timeline, the agency is targeting a 2030 launch.

This example highlights that even if things are going well, Firefly Aerospace could need to endure losses for some time yet because it simply takes time to develop plans for outer space. For this reason, I'll patiently wait on the sidelines for the foreseeable future with this one.