Shares of rocket and satellite company SpaceX (SPCX -13.61%) have tumbled almost as fast as they climbed. After its market debut this month sent shares as high as $225.64, the stock has since fallen about 32% to about $153 as of this writing.
A pullback like this in a stock investors couldn't get enough of just weeks ago raises an obvious question: Is now the time to buy? The company behind Starlink and a leading rocket-launch business is one of the most closely watched companies anywhere. But a lower price doesn't automatically make a stock a good deal -- and in SpaceX's case, the valuation still looks stretched.
Image source: Getty Images.
Understanding the drivers behind the SpaceX business
SpaceX completed its initial public offering (IPO) on June 12, pricing shares at $135 -- the biggest market debut in history. The prospectus it filed ahead of the offering gave investors their first detailed look at the financials behind the hype.
The top-line numbers are impressive. SpaceX grew revenue 33% year over year in 2025 to $18.7 billion. And most of that came from Starlink, its satellite internet business, which generated $11.4 billion in revenue (about 61% of the company total), up 48% from 2024. Starlink ended March 2026 with more than 10 million subscribers.
Even better, Starlink is profitable. The segment produced about $4.4 billion in operating profit in 2025, making it the company's profit center.
SpaceX's space segment, which includes its launch business and crew missions for NASA, added about $4 billion in revenue, though the company is spending about $3 billion to develop its next-generation Starship rocket.
This spending, combined with its aggressive outlays to support its nascent AI efforts, means SpaceX is unprofitable overall. The company reported a total net loss of $4.9 billion in 2025 on a retrospectively recast basis that includes the results of xAI, its recently absorbed artificial intelligence (AI) business. That AI segment brought in about $3.2 billion in revenue but is losing money.
NASDAQ: SPCX
Key Data Points
What about the stock's valuation?
Even after a 32% pullback, SpaceX stock continues to look overvalued. With a market capitalization above $2 trillion, a business that loses money on the bottom line, and a price-to-sales ratio of more than 100, the bull case rests on highly speculative assumptions about the company's long-term prospects.
A valuation multiple like this prices in years of flawless execution -- not just continued rapid growth at Starlink, but a path to substantial companywide profits even as SpaceX funds Starship and absorbs xAI's losses. It assumes nearly everything goes right. Little wonder some on Wall Street think the valuation got ahead of the business. Morningstar, for one, pegs SpaceX's fair value at about $780 billion -- about half its private-market valuation -- and calls the stock significantly overvalued.
To be clear, I love the business. And I believe it will do extraordinarily well over the long haul. SpaceX has a dominant launch franchise and, in Starlink, a fast-growing, high-margin asset few companies can match. The problem is what you pay for it. It's nearly impossible to justify a price anywhere close to where the stock trades today.
That said, I wouldn't be surprised to see shares keep trading on sentiment rather than fundamentals. SpaceX has a huge retail following and a founder, Elon Musk, who commands enormous attention -- and stocks like that can stay expensive far longer than the numbers alone would suggest. So while the shares could certainly move higher from here, the math doesn't work for me, and I can't base an investment case on unpredictable sentiment. I'll personally be watching from the sidelines.
