BlackSky Technology (BKSY) surges 13.61% in pre-market trading as Jefferies initiates Buy rating coverage.

Shares of BlackSky Technology (BKSY) rose 13.6104% in pre-market trading on Dec. 23, 2025, driven by Jefferies’ initiation of coverage with a “Buy” rating and a $23 price target. The firm highlighted the company’s Gen-3 satellite constellation, which delivers 35cm resolution and high-frequency revisit rates, as a key differentiator in the growing “Sovereign Space” market. Jefferies noted BlackSky’s $323 million backlog, 91% of which stems from international contracts, and projected revenue growth to accelerate from 6% in 2025 to 24% in 2026. The analyst emphasized the SaaS-like margin profile, with incremental data contracts expected to yield over 65% margins, supporting a path to free cash flow positivity by 2028.

The rally followed a November 2025 operational milestone, where the third Gen-3 satellite entered commercial service swiftly, reinforcing confidence in the company’s scalability. Institutional interest appears to be rekindling in the “New Space” sector, as BlackSky’s government-backed contracts and hardware-driven model gain traction.

Jefferies’ report also underscored the strategic shift toward dual-use technologies that serve both commercial and defense clients, a trend amplifying demand for high-resolution orbital intelligence amid global geopolitical tensions.

BlackSky’s ascent reflects broader sector momentum, as nations prioritize sovereign satellite capabilities for strategic autonomy. The firm’s AI-integrated platform, which automates real-time insights from ground activity, positions it to capture a significant share of the market. While risks persist—such as launch delays or satellite failures—the current valuation signals investor optimism in BlackSky’s ability to convert its backlog into sustainable revenue. With the Gen-3 constellation nearing full deployment by 2026, the stock’s trajectory will hinge on execution against these ambitious expansion goals.

Investors tracking the company’s progress toward free cash flow positivity by 2028 will likely watch both its contract fulfillment and operational reliability closely. The satellite-as-a-service model is still maturing, and while the market potential is vast, execution risks remain a critical factor. Analysts have not identified any technical or fundamental events in the article that can be used to construct a backtest query from the defined list.