Since its landmark initial public offering last month, investors in SpaceX have largely been navigating in the dark, with minimal financial projections available to assess the stock's true worth.
This situation is set to shift next week. The quiet period for analysts from the banks that underwrote the $86 billion IPO will conclude. The deal, led by Goldman Sachs Group, Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase, with 18 other banks also participating, will see a wave of new research reports, price targets, and growth forecasts expected to begin arriving for investors starting next Tuesday. This influx of information should provide greater insight into the stock's potential trajectory in the short term and over the coming years.
Art Hogan, Chief Market Strategist at B. Riley Wealth, commented: "Everyone is talking about what this company could look like by 2030, not what it will look like over the next 12 months. This is an investment focused on a brighter future, but we still need to consider the next four years."
The core challenge in valuing SpaceX lies in the significant gap between its current financials and the market's expectations for the near future. Based on early projections from a handful of analysts at firms not involved in the IPO, SpaceX is forecast to generate roughly $36 billion in revenue by 2026. Furthermore, the company is not yet profitable.
Data compiled by Bloomberg indicates that, based on projected revenue for the next twelve months, SpaceX trades at a price-to-sales multiple as high as 41. For comparison, using the same metric, Palantir Technologies Inc., the highest-valued stock in the S&P 500 Index, trades at a multiple of 32. Apple and Microsoft both have forward price-to-sales multiples below 9.
Robert Gruendyke, Senior Portfolio Manager for the Growth Equities team at Allspring Global Investments, stated: "A substantial portion of the company's future value is tied to revenue streams that are, to some degree, still quite distant. This will result in the stock exhibiting significantly higher volatility compared to the shares of most more established companies with steadier business models."
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