Will Lockheed Martin's Race to Mars Threaten Its Profits?

Will Lockheed Martin's Race to Mars Threaten Its Profits?

Lockheed Martin LMT was an integral part of the first “Space Race” and is poised to be a major player in the recently reinvigorated domestic space program, which includes plans to land humans on Mars by the 2030s.

Lockheed’s Role

The U.S. government contracted the aerospace and defense company to design and build the first Viking sounding rocket in 1949. Since then, Lockheed has worked extensively with NASA and helped propel numerous space explorations. And now, the company is ready to be a mainstay in the new 21 st Century Space Race.

“In terms of being the first to Mars, we have been on every Mars mission for it from the very first one,” CEO Marillyn Hewson told CNBC . “I think we will continue to be on every mission to Mars.”

Hewson talked about two of Lockheed’s current space-related projects, including the Orion deep space capsule and the InSight spacecraft. Lockheed’s chief executive also seemed to welcome new private entrants into the world of space exploration. “It’s great for attracting talent into the space programs that we’re working on,” Hewson noted.

Competition to Mars

The new “Race to Mars” has been driven, in large part, by Tesla TSLA CEO Elon Musk and SpaceX. Musk has conducted a series of highly publicized rocket launches over the last year, and plans to try to colonize Mars as early as 2022.

To many experts, Musk’s timetable seems a little too condensed, but it has undoubtedly forced companies like Boeing BA and Lockheed to stay on their toes.

Next stop Mars! But first, the @NASAInSight spacecraft heads to California for launch on an #AtlasV rocket. pic.twitter.com/M40iXBTvv1

– Lockheed Martin (@LockheedMartin) March 1, 2018

Lockheed’s Mars Base Camp is the company’s plan to send humans to Mars. But investors should note that this heavy investment in space isn’t projected to hurt Lockheed’s bottom line any time soon. Our current Zacks Consensus Estimate calls for Lockheed’s earnings to surge 13.3% in the current quarter, despite spending on Mars-related projects.

The company’s bottom line is also projected to climb by over 16.4% in its current fiscal year. On top of that, Lockheed is expected to see its EPS figure expand at an annualized rate of 7.33% over the next three to five years.

Lockheed noted that the Mars Base Camp concept is “built on a strong foundation of today’s technologies – making it safe, affordable and achievable.” Moreover, these plans could one day propel the company to new heights if this current Space Race lives up to the hype.

Lockheed is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Growth in our Style Scores system.

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