The Best 3 Stocks for Potentially Galactic Gains

By Jaimini Desai, Financial Writer + Reporter

March 26, 2025 1:56 PM UTC

The Best 3 Stocks for Potentially Galactic Gains

GILT

IRDM

LDOS

Let’s talk about why investors need to pay attention to space exploration.

Humanity is constantly making progress and fortunes in new frontiers…

As a savvy investor, you can potentially benefit from this fact.

Consider the first people to start connecting computers. They could never fully imagine the changes that would result from their innovation and experimentation, or the massive momentum it would create for stocks.

So, it’s fair to say that we may not fully understand what the future holds for space travel as the cost decreases and the ease of space transportation develops.

Like previous paradigm shifts, space exploration could generate outsized returns for stocks. But only if you choose them intelligently.

Before I get to the stocks, a few more things to consider…

Already, more satellite networks are being deployed to blanket the globe.

Space tourism is expected to be a new industry, and many believe that mining resources from asteroids could also be possible sooner rather than later.

And of course, there will be applications and business models that are impossible to imagine today.

Source: McKinsey

Currently, the space industry is valued at $447 billion, but this is expected to reach nearly $2 trillion over the next decade.

While there are plenty of space stocks out there, many of them are pricey, speculative, and un-investable.

That’s why I used the Zen Ratings system to identify stocks with firm fundamentals that don’t have that kind of baggage.

In today’s topsy-turvy and tweet-driven market, the disciplined edge, provided by the Zen Ratings, can be the difference between investors riding a space boom or detonating before liftoff.

Below, you’ll find 3 stocks that have passed a rigorous review of 115 factors proven to drive growth in stocks — all of them are solid businesses generating significant cash flow with below-average valuations and durable growth prospects.

1. Leidos Holdings (NYSE: LDOS)

Leidos Holdings (LDOS) is a technology and engineering powerhouse, operating in segments like defense, intelligence, civil, and health markets and boasting customers like the U.S. Department of Defense and NASA.

Currently, the company generates just over $2 billion annually through supporting satellite systems, NASA missions, and hypersonic technology. These are some of the company’s fastest-growing sources of revenue.

Unlike other companies selling services to the federal government, LDOS may be less impacted by the Trump administration’s plans to reduce federal spending, as evidenced by analysts raising 2025 and 2026 EPS estimates following its recent earnings report. Additionally, the company has a $37.8 billion backlog.

Smart money is bullish on this stock. Out of 10 analysts who rate the stock, it has 6 Strong Buy ratings, 1 Buy ratings, 3 Holds, and no Sell or Strong Sell ratings. The consensus forecast is $181 which is 41% higher than the current price.

Given these strong fundamentals, it’s not surprising that LDOS earns an A (Strong Buy) from the Zen Ratings, landing it among elite stocks with a historical 32.5% annual return since 2003, trouncing the S&P 500’s 10.8% average annual return.

In a universe of more than 4,600 stocks that we track, LDOS scores in the top 3% for Value due to its forward P/E of 14.4. This is significantly lower than its peers and the broader market at 26 and 21, respectively. It also ranks in the top 5% for Safety given its manageable debt load and strong free-cash flow generation.

These attributes make LDOS a great pick in today’s volatile market while still providing investors exposure to the space theme.

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2. Gilat Satellite Networks (NYSE: GILT)

Gilat Satellite Networks (GILT) designs and manufactures satellite communications equipment. It also provides services for other satellite-based communications networks. Unlike IRDM, GILT is not a pure space play, but it has significant exposure to the space industry through its satellite communications segment.

The company generated about $63% of revenue in Q4 of last year from its Satellite Networks segment, which is directly related to space technology. This segment has been showing strong growth, and analysts have raised EPS estimates in response. Following its latest earnings report, the company raised operating income guidance above expectations.

In turn, analysts lifted 2025 and 2026 EPS estimates by close to 10% and are looking for average revenue growth of 46% over the next 2 years.

In terms of the Zen Ratings, GILT scores a B (Buy). GILT's component grades are particularly impressive for Value, earning it an A grade. GILT's forward P/E ratio of 12, encapsulates its value proposition among space stocks and the broader market despite strong growth prospects.

3. Iridium Communications (Nasdaq: IRDM)

Iridium Communications (IRDM) operates 66 low-earth, orbit satellites which deliver voice and data services for governments, maritime, and aviation customers. Last year, the company had $797 million in revenue as it provides global connectivity in places where traditional mobile and terrestrial networks fall short.

Unlike GILT and LDOS, IRDM is a pure space play as nearly all of its revenues are from its satellite network. Its latest earnings report showed that its subscriber base increased by 17% to reach 2.2 million.

Analysts forecast to grow earnings per share by 26% annually over the next 5 years due to rising demand for satellites driven by IoT devices.

Currently, it has a consensus price target of $32 which is 22% higher than its current price. The company has also topped earnings expectations for 5 straight quarters, and analysts have been consistently hiking full-year EPS expectations for 2025 and beyond due to stronger-than-expected business momentum.

In terms of the Zen Ratings, IRDM scores a B (Buy). Buy-rated stocks have posted an average annual return of 19.8%.

In terms of component grades, IRDM earns a B for Sentiment due to strong insider buying, consistent analyst upgrades, and consistency in performance. It also has a B for Safety given the stability of its stock price, earnings and revenue predictability, and steady improvement in operational metrics.

Like LDOS and GILT, IRDM is quite cheap with a forward P/E of 12. This makes it an apt selection with strong fundamentals, an attractive valuation, and upside exposure to the continued growth and commercialization of space.

The Bottom Line?

When investing in growth themes, there is a major challenge.

Yes, there will be some massive winners, but there is a lot of froth and hype that needs to be filtered out. Many of these stocks are most vulnerable during periods of volatility in markets or periods of economic stability which describes the current state of affairs.

Space is going to be the next trillion-dollar, disruptive industry. IRDM, LDOS, and GLTS are 3 stocks that are fundamentally sound while allowing investors to participate in the conquest of the next frontier.