Analysts Warn SpaceX IPO Valuation Exceeds Sustainable Growth
With the aerospace giant’s IPO priced at $135 per share and more than four times oversubscribed, investors face a lofty price-to-sales ratio amid significant AI-related losses.
SpaceX is scheduled to list on the NASDAQ on June 12, marking its transition from a private entity to a public company with an initial public offering price of $135 per share. The offering aims to raise $75 billion, valuing the company at approximately $1.77 trillion. This valuation makes it the largest initial public offering in history, with demand already driving the subscription rate to more than four times the available shares.
The structure of the offering ensures that founder Elon Musk retains significant control, keeping an 82% voting stake while offering less than 5% of shares to the public. Up to 30% of the allocation is designated for retail investors, a strategy that mirrors approaches used by companies often associated with speculative trading. The company’s financial profile presents a complex picture, as profits from its Starlink division have recently been offset by substantial losses from its newly integrated xAI operations.
Financial analysis from The Motley Fool suggests that the current valuation may be overly optimistic, with too much growth already priced into the IPO. The company’s revenue is heavily reliant on Starlink, which generates all operating profits, while its core space division remains unprofitable. The integration of xAI, which reported $4.3 billion in losses in the first quarter of 2025, has further complicated the profit landscape, implying that SpaceX may remain unprofitable in the near term as it ramps up AI investments.
Leo Sun, an analyst at The Motley Fool, projects that while the stock may experience a brief surge upon debut, it is likely to stagnate as it is revalued at a more sustainable price-to-sales ratio. At the target valuation, SpaceX trades at 95 times its 2025 revenue of $18.67 billion. Even assuming a robust 30% annual revenue growth through 2027, Sun estimates the market capitalisation could fall to $1.58 trillion by June 2027, representing an 11% decline from the current target.
Consequently, the analysis indicates that a $10,000 investment in the IPO would likely be worth less in one year as investors flip shares for quick profits. The Motley Fool has explicitly excluded SpaceX from its list of top stock recommendations, suggesting that investors might find better opportunities in smaller peers such as AST SpaceMobile and Rocket Lab until the market settles on a more grounded valuation.
