Here's How Much Upside Is Left in SpaceX Stock at Its IPO Price, According to an Analyst
Written by Adam Levy for The Motley Fool -> SpaceX will debut at $135 per share and a market value of about $1.77 trillion. SpaceX's future relies on the development of its massive, fully reusable Starship rocket. Low launch costs could make orbital data centers viable, creati
SpaceX will debut at $135 per share and a market value of about $1.77 trillion.
SpaceX's future relies on the development of its massive, fully reusable Starship rocket.
Low launch costs could make orbital data centers viable, creating a business generating hundreds of billions in annual revenue.
SpaceX (NASDAQ: SPCX) will raise a whopping $75 billion from its public market debut at $135 per share, making it the largest IPO in history. Even with that already huge valuation, many investors expect the stock price to climb quickly. Some see a quick first-day pop in the IPO price, while others expect SpaceX to be a great long-term investment.
In its Securities and Exchange Commission registration filing, SpaceX estimated a total addressable market of $28.5 trillion for its various businesses. If that number's taken at face value, there's a ton of upside potential for the stock, even at a value of about $1.77 trillion at its IPO. But that requires SpaceX to rapidly develop its technology and capture a share of those markets. Here's how much upside one analyst realistically sees for the stock.
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A common valuation method is to create a bull case, a bear case, and a base case for a company and use those scenarios to project operating income and cash flow. You can then weight those cases and calculate a weighted average for the stock's fair value. Even if a stock trades above its fair value, it could be worth taking a stake in it to participate in the upside if it has a ton of potential.
Morningstar 's analysts laid out their bull case for SpaceX ahead of the IPO. In its most optimistic scenario, SpaceX successfully develops and scales its Starship rocket by 2028. Starship is the company's massive new rocket, designed to carry a payload of 100 metric tons. That's over 4 times the capacity of its Falcon 9 and 1.5 times the capacity of its Falcon Heavy, which are currently in use. Importantly, the rocket is designed to be fully reusable.
