SpaceX’s Market Debut: A 100-Day Performance Review

Key Points

In the political arena, a leader’s first 100 days often set the tone for their entire tenure. While publicly traded companies operate on a much longer timeline, examining their initial months on the market can provide valuable insights, particularly for a high-profile name like Space Exploration Technologies(NASDAQ:SPCX).

SpaceX has now been a public company for 100 days, and the stock has experienced significant volatility. It surged initially before shedding over 50% of its value from peak to trough in July. Since then, it has rebounded, closing at $154.72 on September 22, roughly matching its $150 opening price on June 12. With the first 100 days behind us, here is SpaceX’s performance report card.

Image source: SpaceX.

Business updates: A

Perhaps the most impressive aspect of SpaceX’s first quarter is how much the business trajectory has shifted since its IPO. The contrast between Q1 and Q2 results is stark. In Q1, the company reported revenue growth of just 15% to $4.69 billion and segment adjusted EBITDA of $1.12 billion. However, in Q2, SpaceX signed deals to lease excess computing capacity to Anthropic and Google. Revenue jumped 92% to $7.8 billion, and segment adjusted EBITDA nearly tripled to $3.5 billion. Additionally, connectivity segment revenue surged 66% as Starlink subscribers doubled. CEO Elon Musk has clarified that he does not view these rental agreements as a long-term growth driver, but rather as a smart way to leverage AI infrastructure and a reminder that the company has multiple levers to pull for growth.

Valuation: C+

SpaceX’s valuation has improved since its IPO, when it traded at a sky-high price-to-sales ratio of around 100. Analysts forecast revenue of $108 billion in 2027. However, not all revenue is equal. The AI compute rental revenue from Anthropic, Google, and others resembles what neocloud companies like CoreWeave and Nebius generate. Those companies are growing at triple-digit rates but are significantly cheaper than SpaceX, especially when factoring in future growth. Despite EBITDA profitability, SpaceX is still losing money on a GAAP basis, with a loss of $541 million in Q2.

Investor sentiment: B+

Initial investor fervor has faded, and the stock now trades on actual news rather than speculation. SpaceX went public with an unusual staggered lockup expiration schedule over the following year. So far, the first two tranches have unlocked, and the stock has weathered the releases relatively unscathed, showing investor confidence and suggesting insiders aren’t dumping shares. The first release on August 6 saw the stock rise 6%, reacting favorably to the lack of downward pressure. The stock fell 4% on August 20 during the second tranche unlock but quickly recovered. These lockups also drive greater allocation to the Nasdaq-100, meaning ETFs like the Invesco QQQ Trust must buy more of the stock, which could act as a tailwind.

Is SpaceX a buy?

With the stock stabilizing, revenue growth dramatically accelerating, and valuation moderating, SpaceX appears more attractive than it did at its IPO. However, with a market cap of $2 trillion, SpaceX is valued like the Magnificent Seven stocks, and many of them look like better buys by comparison. Meta Platforms, for example, has a lower market cap than SpaceX, even after its recent rally on the strength of Muse, its new AI agent. SpaceX still has a lot to prove. I’m comfortable investing in stocks like Meta, which deliver high growth and wide margins at a reasonable valuation, while watching SpaceX from the sidelines.

Source link