How to Invest in SpaceX in 2024

Visionary entrepreneur Elon Musk founded Space Exploration Technologies Corp, or SpaceX, in 2002 to reduce space transportation costs so humanity could eventually colonize Mars. While Musk's ultimate dream for the company has yet to become a reality, SpaceX has become one of the world's most valuable start-ups. It's valued at more than $180 billion as of early 2024. The sky is the limit for SpaceX.

SpaceX has been a groundbreaking company over the years. It was the first private company to develop a liquid-propellant rocket that reached orbit, the first to send astronauts to the International Space Station, and the first to achieve a vertical propulsive landing.

SpaceX has a growing commercial operation. It develops and manufactures spacecraft, provides launch services, and operates a commercial satellite-based internet service from its Starlink satellites.

The company is growing increasingly valuable as its revenues and profits soar. That likely has many retail investors wondering when they'll get their chance to invest in the company. Here's a look at what to consider if that opportunity ever arises.

Is SpaceX publicly traded?

Is SpaceX publicly traded?

SpaceX doesn't trade publicly on major stock exchanges like the New York Stock Exchange (NYSE) or Nasdaq Stock Exchange. So, retail investors can't buy shares of the space exploration company through their brokerage account.

Elon Musk controls the company and owns a significant stake. It's one of Musk's top investments, with reports estimating that he holds between 40% and 50% of its shares. Employees and venture capital investors own the rest of the company's shares.

Will SpaceX IPO?

When will SpaceX IPO?

As of late 2023, SpaceX didn't have an initial public offering (IPO) on the calendar. The company also didn't have any plans to go public. Musk said in April 2023 that SpaceX doesn't need to raise capital to finance its investment programs, so it doesn't need to complete an IPO to bring in money from outside investors to finance growth.

Meanwhile, the company has an active internal trading program to allow employees and existing investors to sell shares. SpaceX was discussing an agreement with investors that would allow insiders to sell their shares at $97 in late 2023. That would provide employees with liquidity for their shares so that the company wouldn't need to complete an IPO to allow insiders to sell shares.

However, there is speculation that the company will take its Starlink satellite internet business public. A report by Bloomberg in November 2023 said SpaceX was working toward separating Starlink to spin that business off to shareholders in preparation for an IPO by late 2024 at the earliest.

Musk quickly denied the report. He said he wants Starlink to achieve smooth and predictable revenue growth and cash flow before it goes public.

How to buy SpaceX stock

How to buy SpaceX stock

Because SpaceX isn't publicly traded, investors can't buy shares through their brokerage accounts. However, some investors can still buy shares through other platforms that offer secondary trading of pre-IPO companies.

For example, Rainmaker Securities is a platform that makes private securities transactions possible. It lets institutions and accredited investors (i.e., high-net-worth individuals or people with a high income) buy and sell shares of privately held companies.

According to a 2023 Barron's article, Rainmaker has traded more than $4 billion in SpaceX stock on its platform. In late 2023, the company's website said it had access to a $10 million block of SpaceX shares available, valued at $83 per share.

Since most investors don't meet the accreditation qualifications, they can't directly buy shares of SpaceX until it goes public. However, they do have options to consider. Following are some top space stocks that can give investors exposure to the markets SpaceX is seeking to capture.

L3Harris Technologies

In 2023, L3Harris Technologies (LHX 3.46%) acquired Aerojet Rocketdyne, a leader in aerospace, defense, and rocket propulsion. Aerojet Rocketdyne has delivered some of the most important innovations in space exploration and discovery over the past century. The acquisition adds to L3Harris Technologies' capabilities as a leader in delivering innovative technology to the space, air, land, sea, and cyber sectors.

Rocket Lab USA

Rocket Lab USA (RKLB 3.29%) is an integrated space company founded in 2006. It provides government and commercial customers with launch services, spacecraft manufacture, satellite components, and on-orbit management solutions.

The company started out focusing on small launch capabilities, developing the Electron launch vehicle, which is now the second-most frequently launched U.S. rocket. It's currently developing Neutron, a larger, next-generation launch vehicle. Rocket Lab has also invested in diversifying its operations into additional space-related solutions.

Virgin Galactic Holdings

Virgin Galactic Holdings (SPCE 3.15%) is an aerospace and space travel company founded by well-known entrepreneur Richard Branson. It pioneered human spaceflight for private individuals and researchers.

The company went public in 2019 when it merged with a special purpose acquisition company (SPAC) run by famous investor Chamath Palihapitiya. After many delays, the company launched its first test spaceflight in 2021. It finally launched commercial services for scientific research in 2023, with plans to launch a new class of spaceships for commercial space tourism services by 2026.

ETF options

ETFs with exposure to SpaceX

Another alternative to consider for investors interested in SpaceX stock is an exchange-traded fund (ETF) focused on the space sector. As of mid-2023, three ETFs focused on the space sector:

• ARK Space Exploration & Innovation ETF (NYSEMKT:ARKX): The actively managed fund (by Cathie Wood) focuses on companies engaged in space exploration and innovation, aiming for between 35 and 55 holdings. It has a reasonable ETF expense ratio of 0.75%. As of mid-2023, the ETF had almost $300 million in assets under management (AUM). L3Harris Technologies was among its top holdings (seventh-largest in late 2023, at 4.9% of its net assets).
• Procure Space ETF (NYSEMKT:UFO): The ETF owns shares of companies involved in space-related industries. Although tiny (roughly $40 million in AUM as of late 2023), it also has a 0.75% expense ratio. It had 36 holdings in late 2023, including Virgin Galactic (the fifth-largest, at 5.2% of its assets).
• SPDR S&P Kensho Final Frontiers ETF (NYSEMKT:ROKT): The passively managed fund focuses on companies that make products or provide space travel and exploration services. The tiny ETF had only about $17 million in AUM and a 0.45% gross expense ratio as of late 2023. The fund held 32 stocks, including L3Harris Technologies (third-largest, at 4.5% of its assets).

Should I invest?

Should I invest in SpaceX?

Although most investors can't buy shares of SpaceX yet, people interested in the company must consider a couple of crucial aspects before buying shares (assuming it eventually completes an IPO). Two of the most important are profitability and valuation. Here's a closer look at these two critical investment factors.

Is SpaceX profitable?

Is SpaceX profitable?

Since SpaceX isn't publicly traded, it isn't required to disclose its financial results. However, given the company's popularity, it has revealed some financial data.

A Wall Street Journal report from August 2023 noted that SpaceX generated $1.5 billion in revenue during the year's first quarter and eked out a $55 million profit. That's a notable improvement for a company that posted annual losses over the past two years ($559 million on $4.6 billion of revenue in 2022 and a $968 million loss on half that revenue in 2021).

Meanwhile, Starlink is nearing profitability on a stand-alone basis. Musk reported that the company reached breakeven cash flow in late 2023. That business unit's revenue has surged six-fold over the past year to $1.4 billion.

These numbers suggest SpaceX is on a profitable trajectory and off to a good start. If it can grow its revenue and profitability at high rates, it will give its stock the fuel to skyrocket in the future.

SpaceX's valuation

What is SpaceX's valuation?

Valuation is another crucial factor for investors to consider before buying any stock. Paying too high a price could cause investors to lose money, even if profits take off.

As of late 2023, SpaceX had a private market valuation of $180 billion ($97 per share) following an ongoing secondary share sale. That was about a 20% increase from its previous valuation of $81 per share, or $150 billion. That makes SpaceX more valuable than leading U.S. defense contractors Boeing (BA 0.25%), Lockheed Martin (LMT -0.75%), and Northrop Grumman (NOC -1.56%).

While the company is profitable, that's a hefty valuation. At $8 billion in estimated revenue for 2023, SpaceX trades at a price-to-sales ratio (P/S) of more than 22 times. If it were a publicly traded company, it would have one of the highest P/S ratios among stocks in the Nasdaq 100 index in late 2023.

Meanwhile, at $2.3 billion in projected net income, SpaceX trades at a forward price-to-earnings ratio of almost 80 times. Although that's expensive, it's not quite as pricey as another Musk-led company: Tesla (TSLA -1.11%) fetched more than 80 times earnings in late 2023.

Those are hefty valuation multiples for the company. However, SpaceX could grow into its valuation if its revenue and profits skyrocket in the coming years. So, it could be trading at a more reasonable valuation by the time it goes public.

Related investing topics

The bottom line on SpaceX

SpaceX isn't currently publicly traded, so most investors can't buy shares of Musk's space exploration company. However, the company or its Starlink satellite internet service business could eventually go public.

If that happens, interested investors should carefully consider the company's profitability and valuation because they will be key drivers of its stock price in the future. If both appear poised to skyrocket, the stock could also soar.

FAQs