The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Robert Cyran

NEW YORK, July 28 (Reuters Breakingviews) - What’s harder: blasting a 100,000-pound object into the sky at over 17,000 miles per hour, or launching onto public markets? Failures among space-bound rocket-makers suggest that financial liftoff might be trickier. Firefly Aerospace, having recently landed a vehicle on the moon, is now looking to pull it off, disclosing on Monday that it is seeking a $5 billion valuation in an initial public offering. The company’s business is growing rapidly, with a backlog of orders standing at about $1 billion adding some thrust to its effort. Snag is, the punchy valuation faces the same issues that burned up similar firms.

Over 2,500 objects were put into space last year, the European Space Agency reckons, ten times more than a decade ago. Much of this growth, though, comes from Elon Musk-run SpaceX. It has launched more than 8,000 satellites for its Starlink internet service since 2020.

This explosive yet concentrated growth lays bare the peril of space. Satellites have become cheaper to build, shrinking in size and growing in capability. Rivals from Amazon.com to global governments want to match Starlink’s success. Yet scale is crucial: development costs are immense, compounded by inevitable failures - after all, even SpaceX still loses rockets to gigantic fireballs. Reducing cost per trip requires spreading expenses over more launches.

There are, at least, adjacent markets for space entrepreneurs, ranging from the established - like snapping images of Earth - to the unlikely, like asteroid mining. Firefly offers rocket launches, spacecraft and plans to offer new products like lunar imaging.

Backed by AE Industrial Partners and defense giant Northrop Grumman NOC.N, Firefly is eyeing a market capitalization of $5.3 billion at the middle of its target price range. Including expected debt and cash raised, that puts its enterprise valuation at about $4.6 billion. If the pace of its $71 million in revenue for the first half of the year holds, that would value Firefly at over 30 times sales, slightly above rival Rocket Lab. Still-private SpaceX sits at 26 times, going by a recently mooted $400 billion valuation, according to Bloomberg, and a projected $15.5 billion in revenue.

Firefly’s revenue has more than doubled year-over-year; continued growth might make it look cheaper. Yet the company faces competition from numerous startups, while directly taking on SpaceX in its home markets is daunting. Moreover, space cowboys have quickly run into trouble before.

Virgin Orbit filed for bankruptcy in 2023. Astra Space went private after nearly going bust multiple times. Sidus Space saw its stock fall 40% on Monday after announcing a capital raise. Even Firefly’s predecessor company went belly-up. What goes up has a tendency to come back down.

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CONTEXT NEWS

Firefly Aerospace plans to sell up to 18.6 million shares at a price range of between $35 and $39 each in an initial public offering. At the middle of the range, the maker of spacecraft and launch vehicles would have a market capitalization of $5.3 billion.

In March, the company succeeded in landing its unmanned Blue Ghost spacecraft on the moon.

The company said that it expects to have generated approximately $71 million in revenue for the first half of 2025, compared to $29 million in the same period last year. Operating cash burn is expected to be around $86 million, while a backlog of orders stands at about $1.1 billion.

(Editing by Jonathan Guilford; Production by Maya Nandhini)

((For previous columns by the author, Reuters customers can click on CYRAN/robert.cyran@thomsonreuters.com; Reuters Messaging: robert.cyran.thomsonreuters.com@reuters.net))