Al Root
As a SpaceX initial public offering approaches, potential investors in Elon Musk's space technology company will need to learn something that Tesla investors already know about the iconoclast.
He isn't a typical CEO.
Typically, Wall Street wants guidance from management that companies can, and will, beat estimates. Beating expectations is, in reality, the base expectation for investors. In the third quarter, 83% of S&P 500 companies beat Wall Street estimates, according to FactSet.
Musk, however, offers more aspirational ideas -- and generally misses his timelines.
The latest example looks to be Mars. One of Musk's goals is to extend human existence beyond Earth, which is one reason SpaceX sells " Occupy Mars" T-shirts. The first step would be to launch a 2026 Mars mission, something Musk started talking about in 2024 and reiterated in 2025.
That now looks unlikely. A 2026 launch "would be a low-probability shot and somewhat of a distraction," Musk told entrepreneur Peter Diamandis in a podcast published this week.
The timeline has slipped. Tesla investors won't be surprised. After all, Musk began discussing truly autonomous cars around 2016. Essentially, he reiterated his prediction every year, and finally in 2025, Tesla launched a robo-taxi service in Austin, Texas.
Musk has admitted he is " pathologically optimistic." To be sure, there is method in the madness. He has essentially trained Tesla investors to discount near-term results and focus on the future.
Tesla stock is currently valued at roughly $1.4 trillion and ended 2025 as the most expensive stock in the S&P 500, according to FactSet, at about 220 times estimated 2026 earnings.
That valuation comes despite two consecutive years of electric-vehicle sales declines. What's more, 2026 earnings estimates have been cut in half, to roughly $2 from north of $4 a share, over the past 12 months. Wall Street price targets have risen to about $425 from $350 over that span. Analysts are more focused on future opportunities, such as artificial-intelligence robo-taxis and robots, than on EVs.
That's the "Elon effect."
When the SpaceX IPO arrives, investors will pore over estimates for its more tangible businesses, such as launch services and Starlink's space-based broadband product, which has more than 9 million customers. They will also ponder the future for SpaceX's less developed defense and AI businesses. (Musk wants to put AI data centers in space, making SpaceX a kind of competitor to the likes of OpenAI or Alphabet.)
A lot of big numbers and potential timelines will get thrown around. The initial timelines will almost certainly prove overly optimistic.
That alone won't doom SpaceX stock, thanks to the Elon effect. Tesla was trading at $1.50 a share in 2010, shortly after its IPO. Its meteoric rise since then demonstrates that missing timelines isn't an existential threat for a Musk stock.
SpaceX has its existing business on its side, too: The company essentially invented reusable rockets, dramatically lowering the cost of reaching space and enabling the entire modern-day space economy.
As for Mars, a launch window opens on Earth about every 26 months, when the two planets are closest to one another. So missing the 2026 launch window means at least a two-year delay.
Investors aren't likely to mind the miss. Mars won't pay the bills at SpaceX like its Starlink service or any of the other applications that Musk can dream up.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 08, 2026 02:00 ET (07:00 GMT)
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