Space Exploration Technologies (SPCX -3.41%), better known as SpaceX, has seen its stock price tumble since it made its market debut in June. After climbing to more than $200 per share shortly after its initial public offering (IPO), the stock now trades at about $108 (as of July 31).
Most investors knew the stock price of the unprofitable, capital-intensive business would be volatile once it started trading, and that volatility doesn't appear to be going away. Wall Street analysts see a huge move in SpaceX's stock price by next summer, according to their price targets. Here's what investors can expect.
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How much will SpaceX be worth in 2027?
The median price target for SpaceX stock among 37 Wall Street analysts is $225 per share. That implies an investment in the shares could more than double by mid-2027.
Some of the reasons for the overall bullish stance on SpaceX include its leading position in space launch technology, which is unlikely to be matched by competitors anytime soon. That enables it to launch rockets at a lower cost and more frequently than anyone else, which should enable it to scale its Starlink telecommunications business, where competing satellite companies have struggled.
The prospect of SpaceX developing orbital data centers also has many analysts excited, as it presents a huge total addressable market. SpaceX is already capitalizing on demand for AI compute with its terrestrial data centers, signing deals with Anthropic and Alphabet ahead of its IPO.
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Key Data Points
Additionally, analysts seem to have increased their price targets simply because Elon Musk is running the company. Not only does Musk attract retail investors, but he also holds an impressive track record of successfully commercializing advanced technology.
On the other hand, sell-side analysts are normally an optimistic group. What's more, a handful of those price targets come from analysts working for the investment banks that underwrote the SpaceX IPO. And while their analysis is separate from the underwriting activity, it's hard to see how their employers' participation in the IPO doesn't influence their analyses.
In other words, take the median price target with a grain of salt.
Can SpaceX double by next year?
While it's certainly possible for SpaceX shares to reach $225 or more by mid-2027 -- after all, it briefly touched that level in June -- a few factors are working against the stock.
First is the lockup expirations set to introduce additional shares to the market. SpaceX issued less than 5% of its total shares in its IPO. Insiders and early investors hold the rest. And with the huge increase in the company's value during the past few years, those early investors will be free to sell as soon as their lockups expire.
The first opportunity for pre-IPO shareholders to sell their stock will come on Aug. 6, two days after SpaceX's first earnings report. The lockup expiration could be a bigger test than the earnings release.
For the most part, SpaceX is valued based on its potential well into the future. Market dynamics could play an even bigger role in the share price in the near term. Investors will get their first glimpse at whether the market can absorb an influx of shares in just a few days.
There are more lockup expirations in the coming months. Select investors and Musk have lockups that won't expire until mid-2027. As such, constant selling pressure could weigh on the stock price during the next year.
Additionally, consider the valuation. Despite their decline in price since the IPO, SpaceX shares still trade for about 75 times sales (SpaceX isn't profitable so price-to-sales is the appropriate metric). Analysts expect sales to get a big boost from leasing out compute capacity to Anthropic and Alphabet, but the stock price is still very expensive.
Lastly, SpaceX's need to raise capital could hang over the stock. Morgan Stanley estimates the company won't produce positive free cash flow until 2035. What's more, it probably will burn about $700 billion in capital before it gets there. That makes SpaceX particularly reliant on the debt market to raise additional capital in the future. If interest rates rise, the cost of capital will increase, further weighing on the stock price.
Overall, I'm not nearly as optimistic that SpaceX will reach the levels predicted by Wall Street. That said, it rarely pays to bet against Elon Musk.
