Space Exploration Technologies (SPCX -4.75%) has been on quite a ride since its debut in the public markets in early June. Shares were originally priced at $135, then quickly rose to $225 before tumbling to around $123 as of July 22. For a long-term, fundamentals-focused investor, it's not the volatility that's keeping other investors and me away; it's still the inflated valuation.
NASDAQ: SPCX
Key Data Points
Even after more than $1 trillion was wiped from SpaceX's market cap, the company is still inflated at a $1.6 trillion valuation. With less than $19 billion in revenue, that's still close to 85 times sales. A nearly triple-digit multiple doesn't make sense given last year's 33% growth rate. Elon Musk's company is also spending a tremendous amount on capital expenditures, expected to reach $40 billion this year. SpaceX is nowhere near profitable.
Image source: The Motley Fool.
What the company could achieve with its Starlink and rocket business is truly inspiring and exciting. SpaceX acquired Anysphere, the parent company of Cursor, which should add significant revenue. That's a positive for investors, but I'd still like to see more organic growth than purchased growth over the next several quarters.
If SpaceX can show consistent growth and a path to profitability, eventually I'd be more ready to climb on board. However, I still don't feel comfortable buying a company that is years away from its revenue justifying its price.
Right now, the upside for retail investors looks farther away than a colony on Mars.
