Why Terran Orbital (LLAP) stock could soar even higher

U.S. satellite manufacturer, Terran Orbital (NASDAQ: LLAP) soared close to 100% on Wednesday after announcing it signed a deal with Rivada Space Networks worth $2.4 billion. The contract will see it design, build and launch 288 low-earth satellites.

The LLAP stock price rose from $1.70 at the close on Tuesday, to an intra-day high of $3.32 on Wednesday.

But that’s when the short-sellers moved in, sensing an over-the-top market reaction.

According to market data, short interest in LLAP stock increased by close to 10% late Wednesday, taking the short percentage of the Terran Orbital float to around 7%.

Since its intraday high on Wednesday, the LLAP stock price has fallen by around 12%.

But retail interest in LLAP stock intensifies

While short interest spiked in LLAP stock following the explosive share price movement, retail investor interest has also increased, with Terran Orbital suddenly thrust into the spotlight on social media and stock market forums.

Following the huge contract news, Terran Orbital climbed from obscurity to the top 5 most active tickers on Stocktwits.

And it is now the second most-watched stock on the platform, ahead of the likes of NVIDIA Corp, Tesla, Alibaba, the SPY and Bitcoin.

Meanwhile, on Thursday morning, the LLAP ticker was the 7th most mentioned stock code on Twitter.

So, will the LLAP stock gains continue?

While it will take some for the $2.4 billion contract to impact Terran Orbital’s balance sheet, the announcement appears to be hugely material for the long term growth and resilience of the company.

Here’s what LLAP’s CEO, Marc Bell, had to say.

“Our partnership (with Rivada Space Networks) shows why Terran Orbital continues to be a satellite manufacturer of choice for aerospace and defense companies worldwide. We are ecstatic to work alongside Rivada and look forward to building out their LEO constellation.”

So when exactly will investors see all that cash?

It’s anticipated the first milestone payment for the contract will be made upon delivery of 144 “phase-one satellites” which is expected no later than the first quarter of 2026.

But what the short-sellers might be discounting is a minor detail in the contract, that could actually turn into an enormous win for LLAP stock holders.

The contract comes with an option for the purchase of an additional 300 satellites, to complete Rivada’s planned LEO satellite constellation.

This detail wasn’t in the press release issued by Terran, but can be found in the SEC filing, which you can read here.

Here’s a screen shot, for good measure.

LLAP stock

But Terran is not just a one-trick pony.

With 120,000 square feet of manufacturing space in California, it counts the US Department of Defense, NASA, and the likes of Lockheed Martin Corporation (NYSE: LMT) as key clients.

The company projects its current revenue pipeline is valued at around $15 billion.

The one question is, can LLAP turn the deals into profit? The company is currently unprofitable with net debt $169 million.

But that could very quickly change.