Space Exploration Technologies (SPCX +0.93%) (SpaceX) debuted on the stock market on June 12 as the largest initial public offering (IPO) in history, and after its one week, it was the world's sixth-most-valuable company, with a market cap of just over $2.43 trillion. Despite the hype surrounding SpaceX and its initial pop, there's one reason I wouldn't touch the stock right now: it's too expensive and therefore too susceptible to a sudden pullback.
A company's price-to-sales (P/S) ratio tells you how much you're paying for every dollar of its revenue. The higher the P/S ratio, the more expensive a stock is considered. Using SpaceX's June 18 market cap and its $18.67 billion in 2025 revenue, its P/S ratio was be 130.2, which is extremely expensive.
For perspective on how expensive that is: It's 36.5 times higher than Amazon, 6.4 times higher than Nvidia, and 9 times higher than Elon Musk's other company, Tesla.
AMZN PS Ratio data by YCharts
Being expensive doesn't always mean being a bad investment. Sometimes, premium companies command a premium price. But at its valuation after one week of trading, there's a lot of hype and speculation baked into SpaceX's stock, all while it's unprofitable (it lost $4.94 billion in 2025) and built on visionary promises.
SpaceX is capable of growing into its valuation, but as it stands, it's priced for perfection and will likely be highly volatile over the next couple of years. On Monday, the stock fell 16%, and SpaceX will likely continue experiencing ups and downs. It's a stock I'd rather access via an ETF than own directly to reduce risk.
