Space Exploration Technologies (SPCX +0.45%) went public on June 12 at $135 per share. At that price, the company had a market value of $1.77 trillion, making SpaceX the largest IPO stock in history.
SpaceX peaked at $202 per share in mid-June, but the stock has since declined about 30% to $140 per share due to concerns about heavy spending and lock-up expirations. History says this will happen next.
Image source: The Motley Fool.
History says SpaceX's stock will drop further by June 2027
IPO stocks often pop during their first few days on the market. More than 9,000 companies have listed shares on U.S. exchanges since 1980, and the average stock gained 19% on day one, according to Jay Ritter, a finance professor at the University of Florida.
SpaceX fit that historical pattern perfectly. The stock closed at $161 per share on its first day of trading, precisely 19% above its IPO price of $135 per share. But the stock is currently 30% below its high due to market concerns about heavy spending on artificial intelligence infrastructure and upcoming lock-up expirations.
Unfortunately, history says SpaceX stock could decline further in the coming months. Large IPO stocks have generally performed poorly during their first year on the public market:
- Among the 10 largest U.S. IPO stocks by market value since 2006, the average stock fell 34% from its IPO price at some point during the first year. If SpaceX matches that historical pattern, the stock will drop to $89 per share before June 2027. That implies 36% downside from its current share price of $140.
- Among the 10 largest U.S. IPO stocks by market value since 2006, the average stock traded 12% below its IPO price after its first year on the market. If SpaceX matches that historical pattern, the stock will trade at $119 per share by June 2027. That implies a 15% downside from its current share price.
Here's the big picture: Statistically speaking, SpaceX stock is likely to decline further in the coming months. But historical data is never a guarantee of future returns. Whether SpaceX stock moves higher or lower depends primarily on the company's financial results and investor sentiment.
SpaceX's free cash flow was -$25 billion through the first half of 2026
SpaceX is a vertically integrated business with operations across three segments: space, connectivity, and AI. The company has an important economic moat in reusable rockets, which have substantially reduced the cost to launch payloads into orbit. That competitive edge helped SpaceX build Starlink, the largest satellite internet service in the world.
SpaceX delivered encouraging top-line results in the second quarter. Revenue increased 92% to $7.8 billion, a sharp acceleration from 15% revenue growth in the first quarter. The primary reason for that acceleration was especially strong momentum in the AI segment, where sales more than tripled.
However, SpaceX also recorded a negative free cash flow of $25 billion during the first half of 2026. At that pace, the company will burn through the $100 billion in cash and equivalents on its balance sheet in two years. But cash burn could accelerate as it ramps up AI capital expenditures (capex).
SpaceX must also contend with upcoming lock-up expirations. The float (shares available for public trading) increases as lock-ups expire, and insiders may be eager to sell shares. In total, SpaceX's float will increase from 1.8 billion today to 5.2 billion by early December. That could translate into significant selling pressure.
NASDAQ: SPCX
Key Data Points
Wall Street says SpaceX stock is deeply undervalued
SpaceX trades at 90 times sales. That makes it more expensive than every stock in the S&P 500 (^GSPC -0.25%). For context, the most richly valued stock in the index is Palantir Technologies at 73 times sales. That means SpaceX is currently 23% more expensive than the most richly valued stock in the S&P 500.
Yet Wall Street thinks SpaceX is undervalued. Among 40 analysts who follow the company, the stock has a median 12-month target price of $217 per share, according to The Wall Street Journal. That implies 55% upside from its current share price.
I think patient investors should consider buying a very small position today.
