Shares of York Space Systems sank Friday after the satellite technology company slashed its full-year guidance due to shifts in how the U.S. government is acquiring spacecraft systems.
York Space Systems stock dropped 11% to $10.20 in premarket trading on Friday after ending Thursday up 4.3%. Shares have declined 22% this month. Since the closing bell of the stock's first day trading on Jan. 29, shares have declined 66%.
The space economy has taken up a lot of investor focus recently on the back of the SpaceX's initial public offering. SpaceX stock added 1.6% to $143.58 before the opening bell on Friday.
Shares of Intuitive Machines, the lunar lander and space technology company, advanced 5.3% in premarket trading on Friday. The stock ended Thursday up 3.6% after the company reported second-quarter revenue growth of 310%.
York Space Systems late Thursday said it expects full-year revenue between $375 million and $405 million, down from its previous $545 million to $595 million view. The new outlook was well below Wall Street's forecast for $557.7 million, according to FactSet.
The company said the reason for the 32% cut at the midpoint for its revenue guidance was the "removal of the new business revenue in 2026 given the shift in government acquisition methodologies."
"We are working on a pipeline of government opportunities worth $11.5 billion, across 12 potential customers. This analysis considers the next two years, and we only included opportunities from potential customers we have spoken to directly," York Space Systems said in a press release.
Management added there also will be a negative impact on adjusted Ebitda in the second half of the year.
Interim Chief Financial Officer Brian Frantz on the earnings call further explained the decision. He said that "given the contract environment" York Space Systems decided to remove new business from its guidance.
"The remainder relates to supply chain issues, where revenue is moving to the right into 2027, which is partially offset by revenue from our new acquisitions," Frantz said.
"We believe the rightward shift of 2026 revenue plus the eight contracts we've already won so far this year position us to take significant strides in 2027, as the government looks to accelerate capabilities with proven provider," he added.
Jefferies analyst Sheila Kahyaoglu wrote Thursday that the big takeaway from the second-quarter earnings was the reduced guidance and that the new outlook implies revenue in the second half of the year of about $181 million. The firm has a Buy rating on the stock with a $32 price target.
Raymond James analyst Brian Gesuale added Friday that "the reset" has arrived for York Space Systems and that the company must now work to "rebuild" its backlog.
Gesuale maintained his Market Perform rating on the shares, but noted the guidance reinforced "concerns around procurement process and expectations."
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