SpaceX stock was slipping early Monday. Wall Street analysts are showing some skepticism about the valuation of Elon Musk's space company after its huge initial public offering.
The shares were down 5.4% at $175.05 in premarket trading. If the move holds, it will mark a third consecutive session of losses, although the shares remain well above their IPO price of $135.
KeyBanc analyst Michael Leshock and his colleagues initiated coverage of the stock with a Sector Weight rating and no price target, citing the need for more evidence on the progress of reusable launch vehicle Starship to justify being more positive.
" SpaceX possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced, in our view," Leshock wrote.
The KeyBanc team noted that it is tricky to value SpaceX, with no other company spanning its range of rocket launches, satellite broadband, and artificial intelligence. However, Leshock noted the company is currently trading at a price-to-sales ratio of around 29 times his forecast for its 2027 revenue -- a significant premium to almost all its peers across the space, telecoms and AI sectors.
"We believe Starship-related milestones are what will ultimately dictate the pace of growth for the Connectivity segment (Starlink, Starshield) and non-terrestrial AI growth (future orbital data centers)," Leshock wrote.
Right now, analysts' opinions on the fundamentals of SpaceX are likely to take a secondary role to trading dynamics. There are just 639 million shares available to trade, a fraction of the more than 13 billion shares that SpaceX has outstanding.
Barron's has previously warned that the stock could come under pressure as employees and early investors are permitted to sell shares in the coming months under a staggered lockup release plan.
