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Investing.com - Canaccord Genuity has lowered its price target on BlackSky Technology Inc. (NYSE:BKSY) to $27.00 from $28.00 while maintaining a Buy rating on the stock. The company, currently valued at $787.48M, has demonstrated remarkable momentum with a 166.89% return over the past year. According to InvestingPro analysis, the stock currently trades above its Fair Value.
The adjustment comes as the firm evaluates potential impacts from proposed cuts to the Department of Defense’s commercial imagery budget for fiscal year 2026, which could see a 30% reduction from the expected $400-450 million allocation. Despite these concerns, BlackSky maintains impressive gross profit margins of 69.27% and operates with a moderate debt level, according to InvestingPro data.
Despite these proposed cuts, Canaccord Genuity analyst Austin Moeller expressed confidence that Congress would likely reverse the DoD budget reductions, citing similar reversals in NASA’s budget where proposed $6 billion cuts were largely restored to $24.8-24.9 billion.
The firm noted that BlackSky’s current $366 million backlog as of Q1 2025 consists almost entirely of contracts with international governments, potentially insulating the company from immediate U.S. budget fluctuations.
Canaccord’s optimism is further supported by public criticism from members of Congress regarding the imagery budget changes and the Trump Administration’s advocacy for increased use of commercial satellite data.
In other recent news, BlackSky Technology reported preliminary second-quarter revenue of $22.2 million, which fell short of analysts’ expectations of $27.5 million. Consequently, the company revised its full-year revenue guidance to a range of $105 million to $130 million, down from the previous forecast of $120 million to $145 million. This adjustment is attributed to anticipated impacts from budget uncertainties and contract timing volatility. H.C. Wainwright, however, remains optimistic about BlackSky’s long-term outlook and has raised the company’s stock price target to $28, maintaining a Buy rating. Additionally, BlackSky announced a $160 million convertible notes offering at an 8.25% interest rate, which increased from an initially planned $125 million. The proceeds will primarily be used to repay outstanding borrowings and fund general corporate purposes. As of June 30, 2025, BlackSky reported $94.9 million in cash and cash equivalents, a significant increase from $42.3 million a year earlier, largely due to equity issuances. The company also maintains its capital expenditure guidance at $60 million to $70 million for 2025.
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