SpaceX Shares Fall 32% After IPO – Valuation Concerns Temper Enthusiasm

Key Points

SpaceX (NASDAQ: SPCX) shares have dropped sharply since the company’s IPO earlier this month. After debuting as high as $225.64, the stock is now trading near $153, representing a roughly 32% decline.

The steep pullback has renewed debate among investors about entry points. While SpaceX’s Starlink service and launch capabilities remain highly regarded, the lower price does not automatically signal a bargain, especially given the company’s still‑elevated valuation.

Image source: Getty Images.

Understanding the drivers behind the SpaceX business

SpaceX went public on June 12, pricing its shares at $135 in the largest IPO in history. The offering documents gave investors a detailed look at the company’s financials.

For the 2025 fiscal year, SpaceX recorded $18.7 billion in revenue, a 33% year‑over‑year increase. The majority of this growth came from Starlink, which generated $11.4 billion (about 61% of total revenue) and expanded its subscriber base to more than 10 million by the end of March 2026.

Starlink turned profitable, producing roughly $4.4 billion in operating profit in 2025. This segment is the company’s primary source of earnings.

SpaceX’s space‑flight operations, including launch services and NASA crew missions, contributed about $4 billion in revenue. However, the firm is investing roughly $3 billion in the next‑generation Starship program, while also allocating capital to its AI initiatives through the recently integrated xAI division.

The combined costs of these projects left SpaceX with a net loss of $4.9 billion in 2025. xAI alone brought in $3.2 billion in revenue but remains unprofitable.

What about the stock’s valuation?

Even after the recent 32% drop, SpaceX’s valuation continues to appear stretched. The company boasts a market capitalization exceeding $2 trillion, trades at a price‑to‑sales ratio above 100, and yet reports a net loss.

Analysts argue that such a multiple assumes years of flawless execution—continued rapid growth in Starlink, profitability at the corporate level, and successful development of Starship—all while absorbing losses from AI ventures. Morningstar, for instance, estimates a fair value of roughly $780 billion, about half of the current market price, and labels the stock as overvalued.

The author acknowledges the strength of SpaceX’s launch franchise and Starlink’s high‑margin growth but cautions that the current share price is difficult to justify based on fundamentals. Sentiment‑driven trading and the strong following of founder Elon Musk could keep the stock elevated, but the author prefers to wait for a more favorable risk‑reward profile.

Investors weighing SpaceX at its current price should consider the ongoing investment burden, the lofty valuation multiples, and the company’s path to profitability. A cautious, data‑driven approach may be more prudent than reacting to short‑term sentiment.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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