Michael Sikand 🦑@michaelsikand
I just put 15% of my $5,000,000 fund in $FLY 🪰🌖
Firefly Aerospace is a misunderstood space stock trading 35% off its ATH with an extremely unique set of assets.
Here's why I think this $6B space pioneer is an asymmetrical bet.
I love $FLY because its business spans the full orbital stack: roughly 20% launch, 40% spacecraft, and 40% defense software.
On the spacecraft side, $FLY’s Blue Ghost lander makes it the only company in history to land successfully on the moon. A 10 year old space startup achieved the same feat only 5 countries had before. It now has $487M in contracted NASA missions and CEO Jason Kim has said Firefly is in discussions with NASA about block buy contracts for 5 to 10 landers, which would represent between $500 million and $1.4 billion in a single order. That’s asymmetric growth against a company doing $160 million in trailing revenue.
$FLY also has a spacecraft called Elytra which is this swiss army knife of sorts. It’s part tugboat, part sentinel. It launches payloads, deploys them, then stays on station for years as a comms relay, surveillance platform, or deployer. What I love about Elytra is that it’s about to monopolize lunar imaging using Nvidia Jetson compute which can create high-margin revenue to map mining and landing sites as we work to colonize the moon.
Now the real leverage with $FLY is that it also builds its own rockets. It has a small lift rocket called Alpha that’s done seven launches (it’s worth noting only 3 were successful, but $RKLB’s first Electron flights were also rocky) and has a medium lift rocket Eclipse launching in early 2027 co-developed with Northrup Grumman. This timeline isn’t too far off $RKLB’s delayed Neutron vehicle now Q4 2026.
The key point here is that Firefly’s spacecraft will one day own the highway on which they travel. As the launch business progresses, it’s de-risked by hundreds of millions worth of lunar landing contracts, helping boost margins on the primary spacecraft division. Vertical integration at its finest.
Don’t get me wrong, $FLY is significantly behind its comparable $RKLB in the launch market. It’s a Ford to a Ferrari. But here's what many retail investors interested in space need to understand.
Space companies like $RKLB and SpaceX are not being priced on their launch businesses as much as they are their higher margin divisions. $RKLB’s premium multiple is justified by their space systems division and specifically the components business (60-70% gross margins) or with SpaceX, Starlink.
That’s where $FLY’s defense software becomes so important. I think it’s the primary vector on which the market is mispricing Firefly.
Firefly bought a missile defense AI software company called SciTec in November that brought $164M in trailing revenue, about equal to $FLY’s entire 2025 haul and about 40% of 2026 guidance in an accretive transaction that was mostly stock at $50/share. This business is EBITDA and cash flow positive, a rarity in any space economy unit. It has a $372M FORGE contract with the Space Force and has major upside with the $185B Golden Dome initiative.
If 40% of $FLY’s revenue is coming from an extremely fast growing Palantir-esque defense software company with margins that are presumably much higher than anything Rocket Lab is doing in space systems…
Then why should $FLY trade at such a steep discount to $RKLB? Just 12.5x forward EV/Revenue compared to 43x for $RKLB. I think as the market better grasps the SciTec opportunity, we could see $FLY re-rate to at least half of $RKLB’s multiple, presenting major upside over the current share price.
Of course there are massive risks with this idea. $FLY isn’t expected to deliver positive EPS until 2028, while comps like $RKLB and $LUNR are expected to do so in 2027. Over $800M in cash is a decent war chest but dilution will happen as the company has maxed out its credit facility, so investors should be prepared for ATMs.
A shitty launch record with Alpha doesn’t instill major confidence for the launch business or the future synergies of that business on the rest of the pie, but it's still early and RKLB electron had early stage issues too. Launch commoditization is a risk here but it's mitigated by the massive pipeline of NASA lunar lander contracts if Eclipse can service some of those payloads. Private equity company AE industrial partners is also a big governance risk, with 3 board seats and majority voting control. They forced a bad acquisition on $RDW, which diluted shareholders. Finally, there’s just massive execution risks in any space business that can lead to significant delays combined with lumpy government contracting revenue that can lead to earnings misses.
Overall, I think $FLY is the most complete small cap space package that the market is still sleeping on. It owns the moon, the rockets, and the software. And if the SpaceX IPO is supposed to re-rate the entire space sector, isn’t $FLY the biggest direct beneficiary since the mission is now the Moon and not Mars? It’s the space stock most primed to directly assist SpaceX with its primary IPO objective.
Check out my full Substack deep dive below to really wrap your head around $FLY, which goes into way more detail.
Note: The “$5M Fund” is the “Asymmetric Bets” portfolio I manage on @joinautopilot, which has roughly $5M of assets retail investors have connected to the platform to follow the trades. Check out the app and associated risk disclosures to see the allocations and subscribe for automatic alerts/updates if interested.
