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SpaceX IPO: Analyst Bullish, Short Seller Skeptical
11 Jun
Summary
- New Street Research assigns $165 target, implying 22% upside from IPO price.
- Analyst projects $195 billion revenue and $65 billion EBIT by 2030.
- Veteran short seller criticizes IPO valuation as overly optimistic.
New Street Research analyst Pierre Ferragu initiated coverage of SpaceX, setting a price target of $165 per share and an 'Overweight' rating just days before the company's planned IPO. This target suggests a potential 22% increase from the $135-per-share IPO price, valuing the company's equity at approximately $2.3 trillion post-acquisition. SpaceX is preparing for its initial public offering on June 12 under the Nasdaq ticker SPCX, aiming to raise $75 billion and achieve a $1.77 trillion valuation.
The analyst's optimistic outlook is based on a sum-of-the-parts analysis, projecting robust growth across SpaceX's diverse business segments. Forecasts indicate revenues of $195 billion and EBIT of $65 billion by 2030, with significant valuations attributed to Starlink, direct-to-cell connectivity, and launch services. The xAI unit is particularly highlighted with a substantial standalone valuation, boosted by SpaceX's ownership of critical physical infrastructure.
Despite the bullish sentiment, skepticism remains. Investor Steve Eisman expressed reservations about the IPO, citing the artificial intelligence pivot as transforming SpaceX into a highly capital-intensive venture with questionable competitive advantages. Veteran short seller Jim Chanos also criticized the IPO valuation, describing it as "fueled by hopes and dreams" rather than concrete financial fundamentals.
