SpaceX Stock: Down 35% But Still Too Expensive?
💡 Key Takeaway
Despite a 35% decline, SpaceX's sky-high valuation leaves it vulnerable to further losses, even as its business fundamentals remain strong.
SpaceX Stock Crashes 35% After IPO Surge
SpaceX (SPCX) went public on June 12 and initially soared to $225, giving it a $2.9 trillion market cap. However, the stock has since plummeted 35% to $145 as of July 10.
The company operates three core segments: space transportation (reusable rockets), satellite internet (Starlink), and AI infrastructure (via its xAI acquisition). SpaceX dominates the launch market with over 80% of mass to orbit, and its upcoming Starship rocket will further widen its lead.
Starlink, with over 10 million subscribers, is the largest revenue driver, generating $11.4 billion in 2025. The AI segment, though smaller at $3.2 billion, has massive growth potential through data center rentals to companies like Anthropic and Alphabet.
Wall Street expects SpaceX's revenue to more than double to $38.8 billion in 2026 and reach $72.4 billion by 2027. Yet even with these projections, the stock remains extremely expensive.
Valuation Risk Could Trigger More Losses
SpaceX's current price-to-sales (P/S) ratio of 98.9 is 15 times higher than the Nasdaq-100's 6.4. Even using 2027 revenue estimates, the forward P/S is 26.3—still far above the market average.
If the stock were to trade in line with the Nasdaq-100's current P/S ratio, it would need to fall 76% from current levels. While that's an extreme scenario, the analyst warns a 50% decline is possible if revenue growth disappoints.
The company's AI rental deals with Alphabet ($920M/month) and Anthropic ($1.25B/month) are promising, but they also create dependency on a few large customers. Any renegotiation or cancellation could hit revenue hard.
For investors, the key risk is that SpaceX's stock price has run far ahead of its fundamentals. Even strong growth may not justify the current valuation, leaving little margin for error.
Source: The Motley Fool
Analysis generated by Bobby AI quantitative model, reviewed and edited by our research team. This is not financial advice. Always do your own research before making investment decisions.
Bobby Insight
SpaceX stock is a sell due to extreme overvaluation, despite strong business fundamentals.
With a P/S ratio of 98.9, SpaceX is priced for perfection. Even if revenue doubles by 2027, the forward P/S of 26.3 leaves little room for error. The analyst's warning of a 50% decline is plausible if growth slows or AI deals falter.
What This Means for Me
