SpaceX (SPCX) Plunges 30% from Peak...Buy Below $165?

▲ SpaceX (SpaceX, SPCX), Rocket, Satellite Internet, Artificial Intelligence (AI)/AI Generated Image

SpaceX (SpaceX, SPCX) has fallen 30% from its all-time high, but its price-to-sales ratio, exceeding 100 times, was still pointed out as a burden making it difficult for investors to readily jump in and buy.

According to Nasdaq on July 7 (local time), SpaceX's stock price hit an all-time high of approximately $225 in mid-June, then dropped to the mid-$150s to early $160s. Although the decline from its peak is about 30%, Steven Porrello did not evaluate the current price as an aggressive buying opportunity.

The core burden is the company's valuation. SpaceX's market capitalization exceeds $2 trillion and is trading at more than 100 times its revenue over the past 12 months. Nvidia (Nvidia, NVDA) trades at approximately 19 times revenue, Microsoft (Microsoft, MSFT) at approximately 9 times, and Amazon (Amazon, AMZN) at approximately 3.5 times.

Porrello assessed that investors have already factored in several years of aggressive growth expectations into the stock price. SpaceX estimates its own market opportunity at approximately $28.5 trillion, but he pointed out that this figure is an estimate derived from the company's own calculations.

As of July 3, SpaceX's average target price was approximately $188, indicating an upside potential of 17.5%. The mandatory quiet period for underwriters involved in SpaceX's IPO ended on July 7, and valuation reports from analysts at major banks may follow.

While Porrello expressed optimism about SpaceX's business itself, he stated, "The price-to-sales ratio is too high by my standards." He suggested that most long-term investors would be better off waiting to invest until more clear business performance is confirmed.

[Article Summary]

-SpaceX's stock price fell 30% from approximately $225 in mid-June, dropping to the mid-$150s to early $160s.

-A market capitalization exceeding $2 trillion and a valuation of over 100 times its revenue over the past 12 months were identified as key burdens.

-Although the average target price is approximately $188, Porrello assessed that long-term investors need to confirm additional business performance.

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