SpaceX and Rocket Lab are the only consistent and reliable launch companies as other space stocks have trouble raising capital, Bank of America says

• A few years ago, several space-launch companies were coming on the scene, Bank of America said.
• But today, just two companies have proven to have consistent and reliable operations, analysts wrote.

Although the SpaceX Starship exploded Thursday during its first attempt to reach orbit, Elon Musk's space company remains a top provider of launch services in what once looked to be a more crowded field.

Just a few years ago, several launch companies were coming to market, raising expectations they would lower costs and make space more accessible, according to a Bank of America note.

"Fast forward to 2023, and there are truly only two launch companies that have proven consistent and reliable operations, only one of which is publicly traded Rocket Lab," analysts wrote. "When presented this reality, most satellite companies expressed their reluctance to being over reliant on certain launch companies, namely SpaceX."

SpaceX and Rocket Lab produce rockets that send payloads, such as satellites, into orbit. SpaceX's Falcon rocket has become a workhorse in the industry and is used by governments and companies. By contrast, the still-in-development Starship is the world's most powerful rocket and is designed to eventually take astronauts to the moon and Mars.

Meanwhile, Rocket Lab's Electron rocket has also completed dozens of missions. But other launch companies like Richard Branson's firm Virgin Orbit have run into trouble. It filed for Chapter 11 bankruptcy protection, partially due to difficulties in securing funding.

BofA analysts noted that raising capital has been difficult for most companies, saying "In line with what we saw with the Virgin Orbit collapse, most companies we met with expressed concerns around raising capital in the current interest rate and risk appetite environment."

On the satellite side, the picture is different. In fact, developers of satellites and related technologies, such as BlackSky, Redwire and Terran Orbital are close to profitability, BofA said.

"Also, contrary to popular belief, the space industry is not blind to the importance of profitability, and most are aggressively seeking this milestone," the note added.

Demand also remains strong, with Terran Orbital citing a new order of 300 satellites. Some companies, have also seen opportunity in new markets. Planet Labs, for instance, has established its presence in agriculture and insurance markets, with the Ukraine war fueling intelligence uses for its services.

"Despite the difficult financing environment, there is more opportunity than ever in space: We believe the financing environment spells more opportunity than trouble for the space industry," BofA said.