Why You Should Buy Blue Origin Stock

  • October 20, 2020

The first question that probably popped into a lot of your heads as you read the title is: What is Blue Origin stock?

It may seem counterintuitive to find a company on an investing website with no ticker symbol on any of the major indices. However, sometimes it's important to know of privately run companies just as much as it is to know about publicly traded companies.

Besides, you have probably heard of the parent company, Amazon (NASDAQ:AMZN) and the man behind the vision, Jeff Bezos.

So what does Blue Origin do? It's one of a handful of firms that are attempting to bring space travel to a mainstream audience.

You may have heard of Elon Musk’s company SpaceX; which was the first private firm to launch a manned space shuttle into orbit earlier this year.

How about Richard Branson’s company, Virgin Galactic? It debuted as a SPAC IPO last October under the ticker symbol (NYSE:SPCE).

If you know what SpaceX and Virgin Galactic do as companies, you’ll quickly understand what Bezos’ Blue Origin is doing as well.

Blue Origin Stock

Blue Origins...Origin

  • Blue Origin was formed on September 8, 2000; nearly 18 years after Jeff Bezos gave his valedictorian speech to his high school graduation class. He talked about how he would “build space hotels, amusement parks and colonies for 2 million or 3 million people who would be in orbit.” Blue Origin is described as an aerospace manufacturer specializing in sub-orbital spaceflight services and is headquartered in Kent, Washington, a few towns over from where Amazon is headquartered. But can you trade Blue Origin stock?

1. Is There a Blue Origin Stock?

We're looking for Blue Origin stock. However, you can't trade it yet as there's no ticker on the stock market. The company has produced a few vehicles already.

One is the Charon jet-powered VTOL which made its inaugural test flight above Moses Lake, Washington at an altitude of 316 feet. 

Not too impressive, right? Well the Charon was designed as a low-altitude vehicle with the main purpose being to test autonomous guidance technology that would eventually be used in the company’s rockets.

The Charon now lives in the Museum of Flight in Seattle, Washington. Blue Origin then crafted the Goddard rocket which had successful flights back in late 2006 and was able to reach an altitude of 300 feet in ten seconds. 

2. Flying Cars

The New Shepard was the first suborbital vehicle from Blue Origin that was able to carry a crew and cargo above the Karman line. This is the international threshold between Earth and space.

It's composed of two distinct parts; the crew capsule and the rocket booster. Both segments are blasted off together.

However they separate in mid-air, with the booster falling back down to Earth and the capsule being hurled into space. There have been several different iterations of the New Shepard.

In fact, all achieved varying degrees of success. In December of 2017, Bezos released a video of the New Shepard’s entire voyage into space for all to see.

With three and a half feet tall windows, we got a little taste of what these $200,000 rides would look like. It's definitely was stunning despite the expensive price tag. That could help with Blue Origin stock price.

Blue Origin Stock

Blue Origin Stock as an Investment?

  • Currently Blue Origin, like SpaceX, remains a privately owned and operated company. There aren't any future plans of appearing on a publicly traded stock market. As a result, there's no Blue Origin stock. The closest you can come to investing in a company like Blue Origin would be to buy shares of its “parent” company Amazon as the two are linked via Amazon’s CEO Jeff Bezos.

The closest you can come to funding a company may be to buy products off of Amazon’s eCommerce site. In fact, Bezos himself has stated that Blue Origin is directly funded by the money he makes from selling some of his shares of Amazon

Whichever the case, there's no direct way to invest in Bezos’ outer space vision at the moment. Therefore, it's difficult to analyze just how Blue Origin stock would perform as publicly traded equity. 

1. Another Company You Could Invest In

One company we can make a comparison to right now is Richard Branson’s company Virgin Galactic. It does trade on the New York Stock Exchange; unlike Blue Origin stock or SpaceX. 

Virgin Galactic made its debut on the public markets in October of 2019 via a SPAC IPO offering by Social Capital Hedosophia. It's a shell company managed by famed venture capitalist and former Facebook exec Chamath Palihapitiya.

Since its inception, $SPCE has done decently as a stock. Although shares have traded mostly sideways for the past few months. The stock peaked as high as $42.49 per share at the end of February.

But has a current 50-day moving average of $17.88 and a 200-day moving average of $17.71; which illustrates how flat the stock has performed of late.

The proposed price tag of $250,000 per ticket. As a result, SPCE is hardly providing a service that's accessible to a majority of people. Which brings into question exactly how large the total addressable market for civilian space travel truly is. 

2. One More Company to Consider

Earlier this month, it was announced that another company called Momentus would also be making its way to the public markets.

They'd be doing a SPAC IPO reverse merger just as Virgin Galactic did last year. Momentus isn't a direct competitor to Virgin Galactic because they're not involved in civilian travel.

However, it's in the business of building spacecrafts; which at least puts it in the same space, pardon the pun. There are a growing number of companies emerging in the space industry.

Therefore, it shouldn't come as surprise that the investing world is trying to get into the sector on the ground floor. There's even a space-themed ETF trading under the ticker symbol NASDAQ:UFO.

Ambitious investors can get an early jump into what could be a booming industry in the near-future. Maybe you'll see Blue Origin stock there soon.

3. Space Travel

UBS analyst Carl Beresford has high hopes that the space industry will one day be out of this world. Beresford puts early estimates at a $1 trillion for global space economy over the next 20 years.

More companies and more countries are beginning to enter the realm. SpaceX fired the first shot in the space race. It successfully sent the first privately owned shuttle into orbit in late-May.

This obviously didn't sit well with Virgin Galactic owner Richard Branson. His company announced that Branson himself would be heading into space in early 2021.

Will Bezos follow in Branson’s footsteps for Blue Origin? Not likely. Branson is known for his brash personality. He's more similar to the charismatic Elon Musk, than the usually reserved Bezos. 

4. Where Does Blue Origin Go From Here?

Apparently not to the stock market. Bezos has made no mention of bringing Blue Origin public anytime soon.

So investors who are chomping at the bit to put their money into the future of space travel will have to look elsewhere. With a company like Blue Origin all we can really speculate on is future opportunity in an industry.

It may not be available to the masses in the near future. Is Blue Origin profitable? Absolutely not. Can we compare it to Virgin Galactic? It's certainly not an apples for apples comparison.

But fundamentally, we can expect similar ratios from its balance sheet. Virgin Galactic’s financials aren't pretty to look at for investors.

There are red figures all across the board. It has an operating margin of -15,626.70%, a return on equity of -120.27%, and an adjusted EBITDA of -$242.16 million. Yikes. 

The Bottom Line

So for now, investing in Blue Origin may seem like a far off hope for the future. However, let’s remember, so was space travel at one point.

It's difficult to surmise when a private company would decide to go public. But we can probably rest assured that it wouldn't happen until the sector is a little more established.

If investors truly believe in the future of civilian space travel and space tourism, the options right now include Virgin Galactic, Momentus, or the ETF NASDAQ:UFO to add to their watchlists.

People can also take an outside look at Boeing (NYSE:BA), Lockeed Martin (NYSE:LM), or Raytheon Technologies (NYSE:RTX) as a way to get a direct way to invest in the aerospace manufacturing side of the sector.

Keep the name Blue Origin on your radar. For speculative companies like this it helps to have deep pockets funding its projects. And the pockets do not get much deeper than Bezos’. 

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