The information void for investors following the record-breaking IPO of SpaceX (SPCX.US) last month is about to end. The analyst quiet period tied to the $86 billion offering, led by Goldman Sachs with co-underwriters including Morgan Stanley, Bank of America, Citigroup, and JPMorgan among 22 banks, concludes next week.
Starting Tuesday, a flood of research reports, price targets, and growth forecasts is expected, providing much-needed clarity on the stock's potential trajectory in both the near and long term. Art Hogan, Chief Market Strategist at B. Riley Wealth, noted, "Everyone is talking about where this company could be in 2030, not the reality of the next 12 months. This is an investment for the far future, but you still have to look four years out."
The core challenge in valuing SpaceX lies in the vast chasm between its current financials and its projected future. Early estimates from analysts not involved in the IPO suggest Space Exploration Technologies Corp. could generate around $36 billion in revenue by 2026, while it remains unprofitable.
Data shows the stock trades at a price-to-sales ratio of 41 times its expected revenue for the next 12 months. For context, Palantir Technologies (PLTR.US), which has the highest such multiple in the S&P 500, trades at 32 times, while Apple (AAPL.US) and Microsoft (MSFT.US) are below 9 times their expected sales.
Robert Grondzik, Senior Portfolio Manager for the Growth Equities team at Allspring Global Investments, stated, "A significant portion of the company's future value is predicated on revenue streams that are, to some degree, far off. That inherently means its stock will be far more volatile than most established, stable companies."
Bridging the Valuation Gap
To bridge the gap between SpaceX's current valuation and reality, Wall Street has painted an aggressive growth picture. Goldman Sachs research projects the company's total revenue could reach $474 billion by 2030. Analysts at Evercore ISI foresee sales potentially surpassing $1 trillion by 2031. Morgan Stanley analysts reportedly estimate revenue could hit $3.4 trillion by 2040.
Vikram Rai, Portfolio Manager and Macro Trader at First New York, quipped, "I might not be alive to see it. When forecasts are pushed that far out, they are essentially unverifiable."
This makes the upcoming wave of analyst reports critical, as they are expected to provide more concrete near-term forecasts and quantitative metrics, offering investors a benchmark for evaluating one of the market's hottest new stocks.
Post-IPO Volatility
The stock priced at $135 on June 11, opened at $150 the next day, and soared quickly. By June 16, it closed at $201.80, achieving a market capitalization of $2.6 trillion and becoming the world's sixth-largest company. However, the momentum reversed. On Wednesday, it closed at $157.54, with its market cap falling below $2.1 trillion, down 22% from its peak and nearing its post-IPO opening price.
Wall Street sentiment remains broadly positive. Of the 12 analysts tracked, eight rate the stock a "Buy." Price targets for the next 12 months range from $165 to $401, with an average target of $223, implying a 41% upside from Wednesday's close.
Published estimates suggest SpaceX could achieve a small profit by 2028, with revenue quadrupling to $160 billion. However, analysis by industry research analyst George Ferguson and his team indicates that even with an eightfold sales surge by 2030, the company's valuation would remain more expensive than tech giants generating multiples more revenue.
In a June 30 report, they wrote, "Our model suggests SpaceX is overvalued despite projected massive revenue and profit growth over the next five years. Even with sales growing nearly 9x and EBITDA 17x by 2030, the model shows its valuation would exceed the 2026 valuation levels of profitable giants like Microsoft, Meta (META.US), Google (GOOGL.US), and Amazon (AMZN.US)."
Skepticism and Valuation Challenges
This overvaluation partly explains some analyst skepticism. Nicholas Owens of Morningstar rates the stock a "Sell." Argus covers it with a "Hold," stating its valuation multiples may take years to normalize. CFRA analyst Keith Snyder also gives a "Sell" rating with a 12-month target of just $115, below the IPO price, citing excessive valuation and significant capital intensity.
In a June 12 report, Snyder wrote, "The current investment thesis requires investors to endorse multiple expectations that may be difficult to fulfill." He added that SpaceX is difficult to value because it doesn't fit neatly into comparisons with traditional aerospace firms, satellite operators, telecom providers, cloud infrastructure makers, or AI model companies.
"SpaceX is an exceptional company, but even exceptional companies can be unattractive investments if their valuations already price in too much future success," Snyder noted.
Index Inclusion Adds to the Drama
Adding to the drama, the end of the analyst quiet period coincides with SpaceX's inclusion in the Nasdaq 100 index. This move is expected to bring significant buying pressure from funds tracking this key tech benchmark, with an estimated $4.9 billion in inflows anticipated.
David Trainer, CEO of research firm New Constructs, believes this timing could help minimize stock volatility. However, he still cautions investors, as the company's market cap is severely disconnected from fundamentals. "It's priced for perfection and beyond, even beyond this world," he said.
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