Investors have been scrambling to buy SpaceX (NASDAQ: SPCX) stock since its Initial Public Offering (IPO). We can see this in its share price, which has surged as high as $226 in recent days (versus the IPO price of $135).
I’ll think there will be much better buying opportunities here in the months ahead, however. I’m convinced that within a year, I’ll be able to buy the shares for under $100.
A one-of-a-kind company
There’s no doubt that SpaceX is an amazing company. Not only does it dominate the commercial rocket launch market (it has launched more than 80% of mass to orbit for the world each year since 2023) but it also dominates the satellite broadband market (it has 10,000 Starlink satellites in operation).
Additionally, it has a fast-growing AI segment that has contracts with the likes of Google and Anthropic. Of course, there’s also CEO Elon Musk, who many see as one of the greatest entrepreneurs of all time.
The valuation is sky high
The bottom line, however, is that the company’s valuation looks stretched today. At the current share price of $185, the market cap is a whopping $2.4trn.
Given that revenue last year was just $18.7bn, the trailing price-to-sales ratio here is 128. For reference, Nvidia, Alphabet, Tesla, and Amazon have ratios of 20, 10, 15, and 3.5, respectively.
It’s worth noting that one leading research firm believes SpaceX is worth closer to $780bn. That translates to a share price of $63.
Like me, it believes that investors will have better buying opportunities in the months ahead. Right now, it sees SpaceX stock as “significantly overvalued.”
These events could rock the share price in 2026
Now, stocks can remain overvalued for a long time, of course (Tesla has looked overvalued for years). But here’s the thing – there are several catalysts on the horizon that could result in selling activity and a lower share price and valuation.
One is lock-up expirations. Shortly after the company’s Q2 earnings (which will be posted in July or August), long-term investors will be able to sell a significant amount of stock (I imagine that many institutions will sell aggressively given the high valuation).
Another is the IPOs of Anthropic and OpenAI. I think it’s very likely that retail investors will sell SpaceX stock to fund applications here.
Quarterly earnings could also create some share price volatility. If Starlink subscriber growth is disappointing and/or costs blow out massively, investors may take profits off the table.
So, I’m not rushing to buy the space stock today. To my mind, buying now wouldn’t be sensible – the risk/reward profile just doesn’t look favourable.
I think that with a bit of patience, I’ll be able to buy the stock at much lower levels. I really wouldn’t be surprised to see the stock trading below $100 within a year.
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Edward Sheldon owns shares in Nvidia, Amazon, and Alphabet
