SpaceX Stock Forecast and Analysis

Written by Sean GraytokUpdated: 8th May 2022
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SpaceX is currently a private company, so stock in the company cannot be bought in the public markets. But Elon Musk moves fast – SpaceX could go public at any time.

Let’s prepare for its stock market debut in this SpaceX Stock Forecast and Analysis.

SpaceX Stock: Background

SpaceX is an aerospace manufacturer and space transportation services company that was founded in 2002 by Elon Musk.

The company’s reusable rocket technology has revolutionized the space industry by cutting costs and making the impossible possible.

SpaceX works closely with NASA and was the first private company to accomplish several achievements typically reserved for the public sector, like sending a spacecraft full of astronauts to the International Space Station.

SpaceX’s main goal is to colonize Mars and make humanity a multi-planet species.

It is also developing an internet satellite constellation called “Starlink” to provide internet connectivity to all parts of the world.

Elon Musk said SpaceX will go public once it is making regular trips to Mars. It hopes to send its first cargo mission in 2022, followed by a crewed flight in 2024.

SpaceX Stock Investment Potential

#1. Lowering the Costs of Space Exploration

The space economy has few private market participants because of costs – designing, developing, launching, orbiting, and recovering rockets is incredibly expensive.

SpaceX is changing that — the company can launch a rocket for $90 million, compared to $380 million by its competitors. This is due to in-house manufacturing and other advantages associated with being a private versus public company.

SpaceX’s Falcon 9 series of rockets have been flown and reflown over one hundred times.

By developing technology to make rockets reusable, the costs typically linked to space exploration have plummeted.

This allows for more launching and testing, enabling more iterations that lead to better technology and engineering. Rinse, wash, repeat.

#2. Winner Take Most Market

As noted above, the space economy has high barriers to entry due to current costs. The chances of profitability are low, a reality that in turn limits funding and innovation.

This is why only the most ambitious (and connected) entrepreneurs and companies are entering the space exploration and travel market.

There are only three individuals in this area: Elon Musk, Jeff Bezos (Blue Origin), and Richard Branson (Virgin Galactic). They have the reputations to secure funding and the capabilities to recruit top talent.

In terms of legacy corporations, space-related contracts are reserved for those in the Military-Industrial Complex, specifically Boeing, Lockheed Martin, and Raytheon.

SpaceX is actively disrupting these institutions and will benefit from having little competition. Disrupting the disruptor will be no easy task.

Starlink began as a side project at SpaceX to make internet services available to everyone on the planet.

It has become one of the driving forces behind SpaceX’s $74 billion valuation.

Starlink currently has over 1,000 satellites in orbit and plans to increase its constellation to 10,000+ in the coming years.

These satellites provide low-latency internet for users in rural areas that would otherwise have to pay exorbitant fees for connectivity.

Starlink addresses these obstacles at the network level instead of the connection level. Bandwidth increases, and latency decreases with each additional satellite in orbit.

SpaceX estimates that Starlink will cost $10+ billion to build but believes the network could generate $30 billion a year, which is 10x the revenue of its existing rocket business.

If Starlink succeeds, the Internet service market will become democratized, bringing its own set of new consequences.

For example, countries that block certain content and platforms may struggle to do so if their citizens have access to Starlink. This will result in complex geopolitical regulations amongst Starlink and the global superpowers.

Musk has hinted at spinning off Starlink and taking it public. He said Starlink “needs to pass through a deep chasm of negative cash flow over the next year or so.”

He added, “Once we can predict cash flow reasonably well, Starlink will IPO.”

SpaceX Stock: The Economic Moat

SpaceX has a wide moat because of the space industry’s high entry barriers and its low-cost operations relative to its rivals.

These two factors have led to SpaceX establishing a close relationship with NASA, further validating its status as the premier space exploration company.

Ironically, some of SpaceX’s advantages will subside once it goes public and you’re able to buy shares of it. It can be more financially agile as a private company and is less restricted than the typical corporate or government structure.

The core aspect of SpaceX’s moat is that it does things that are really hard to do.

SpaceX Stock Valuation

In February 2021, SpaceX completed an equity funding round of $850 million, increasing the company’s valuation to approximately $74 billion.

This represents a 60% increase from its previous round in August when it raised $2 billion at a $46 billion valuation.

The influx of capital will be allocated to the Starlink and Starship projects, the latter hoping to become the company’s primary orbital vehicle for interplanetary spaceflight.

SpaceX Stock: Getting to Know the Competition

There are many sub-sectors within the broader space market. SpaceX is SpaceX because it does not specialize in any one of these areas. But this welcomes competition from many disciplines.

Let’s see SpaceX’s top competitors:

  • Boeing (BA)
  • Lockheed Martin (LMT)
  • Blue Origin
  • Rocket Lab
  • Northrop Grumman (NOC)
  • Virgin Galactic (SPCE)
  • Virgin Orbit
  • Raytheon (RTX)
  • Sierra Nevada Corporation
  • Relativity Space
  • Firefly Aerospace

Boeing and Lockheed Martin created a joint venture called “The United Launch Alliance” (ULA) to provide launch vehicles to NASA, the Department of Defense, and other organizations.

ULA and SpaceX compete for government contracts and launch the majority of the military’s national security missions.

Elon Musk is extremely critical of the ULA: “Because their rockets are not reusable, it will become obvious over time that ULA is a complete waste of taxpayer money,” he said via Twitter.

SpaceX Stock Bear Cases

While SpaceX has made incredible progress thus far, many of the company’s goals might not be achievable for decades, such as interplanetary flight for private citizens.

We’re talking about putting humanity on another planet. There are plenty of things that can go wrong — many of which are completely out of SpaceX’s control.

Here’s another thing to consider: just because humans can go to Mars doesn’t mean they should go or want to, for that matter.

If society ever gets to the point that humanity must go to Mars, we will have larger concerns than SpaceX’s stock price.

SpaceX Stock Allocation in Your Portfolio

Once SpaceX goes public, you’ll have to decide how much stock, if any, you want to buy.

The following questions might get the ball rolling on how SpaceX fits into your portfolio, secular trends, and its position amongst competitors:

  • Can SpaceX be successful if colonizing Mars does not actualize?
  • Considering satellite Internet is the shorter-term profitability opportunity in the space economy, how does a Starlink spin-off affect SpaceX’s business model?
  • How will regulations that are yet to exist affect SpaceX?
  • Is SpaceX “too early” to multi-planetary expansion?
  • Are you overweight Elon Musk companies?
  • Will Elon Musk remain CEO of potentially three publicly traded companies in Tesla, SpaceX, and Starlink?
  • Can SpaceX continue to lower the costs associated with space exploration and travel?
  • Is SpaceX positioned to fend off competition from Jeff Bezos’s Blue Origin and other private challengers like Rocket Lab?

SpaceX Stock: FAQs

Can I buy stock in SpaceX?

No, you cannot buy SpaceX stock because it is a private company. Shares of SpaceX will be available to buy in the public market following its public offering, which has not yet been announced.

No, Starlink is a subsidiary of SpaceX and not a publicly-traded company. However, Elon Musk said that Starlink will IPO once its cash flow stabilizes.

You cannot buy Starlink stock because it is not a publicly-traded company. It is currently a project at Elon Musk’s private space company, SpaceX. You will have to wait for SpaceX’s IPO or a Starlink spin-off IPO to buy stock in Starlink.

Will SpaceX ever go public?

Elon Musk said that SpaceX will not go public until it is making regular trips to Mars. SpaceX’s first cargo mission to Mars is planned for 2022, followed by a crewed mission in 2024.

Does SpaceX affect Tesla stock?

SpaceX and Tesla are separate companies with different employees and financials. However, having the same CEO does result in some overlap. It’s possible that Elon’s actions while wearing a SpaceX polo could affect Tesla stock. However, investors should not expect an increase in Tesla stock following a successful rocket launch.

SpaceX Stock: Fast Facts

No Earth-based government has authority or sovereignty over Martian activities.

So, who decides the laws on Mars? From Starlink’s terms of service:

For Services provided on Mars, or in transit to Mars via Starship or other colonization spacecraft, the parties recognize Mars as a free planet and that no Earth-based government has authority or sovereignty over Martian activities. Accordingly, Disputes will be settled through self-governing principles, established in good faith at the time of Martian settlement.

Bottom Line: SpaceX Stock Forecast

SpaceX will be the purist-play space investment following its eventual IPO. While Musk says the company will not go public until it achieves regular flights to Mars, we believe a surprise IPO before 2026 is not out of the cards.

Pioneering the last frontier will come with incredible risks — far greater than anything that can happen on a stock chart.

This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we researched SpaceX. 

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and leading expert in investing and financial management. His work has been cited in leading industry publications, such as InvestorPlace and Business Insider. Sean is interested in the people and technologies that are improving the world.