Firefly Aerospace Valuation: Alpha Block II Upgrades and Flight 7 Expectations

Firefly Aerospace's (FLY) recent Block II upgrade announcement and upcoming Flight 7 mission have led to a sharp shift in sentiment, with a 30-day share price return of 80.30% and year-to-date return of 40.61%. The company is trading at a P/S ratio of 47.8x, which is considered expensive compared to the Aerospace & Defense industry average of 3.8x and peer group figure of 3.8x. However, our DCF model suggests a fair value of US$48.26 per share, indicating the current price of US$33.41 is undervalued. The key question is whether the market has already priced in future growth or if the Alpha Block II story is still underappreciated.