Space Exploration Technologies Corp. (NASDAQ:SPCX) experienced a notable rebound on Friday, with shares climbing 15.83% to close at $133.11. This marked the company's largest single-day gain since its June debut, following a week that saw the stock rise 22.8% from $108.37 on July 31. Despite the rally, shares remain 1.4% below the IPO price of $135 and 41% below their post-IPO peak of $225.64.
The surge came as the market digested the expiration of the lockup period on Thursday, which unlocked 911.5 million shares, more than doubling the potential float. Approximately 497 million shares changed hands between Thursday and Friday, representing 54.6% of the newly tradable block, though it remains unclear whether this indicates insider selling. ActivTrades analyst Carolane de Palmas noted that even without heavy selling, the increased share supply is likely to keep volatility elevated.
Financial Performance and Segment Breakdown
SpaceX's second-quarter results reveal a concentration of valuation pressure. The Space and AI segments together accounted for 92.6% of total capital expenditures, with combined operating losses reaching $1.799 billion. Specifically, the Space segment reported a $0.542 billion operating loss on revenue of $0.962 billion, while the AI segment posted a $1.257 billion loss on $2.561 billion revenue. In contrast, the Connectivity segment, driven primarily by Starlink, generated $1.656 billion in operating income on $4.291 billion revenue, nearly offsetting the losses from the other segments.
Starlink's subscriber base has doubled to 12 million, though average revenue per user per month fell 22% to $66. Despite the decline in ARPU, connectivity revenue surged 65.8% year-over-year, fueled by the larger user base. Management projects that growth will help narrow valuation multiples, with CFO Bret Johnsen indicating capital expenditures will remain near current levels for the next two quarters. CEO Elon Musk emphasized the company's aggressive AI compute expansion, stating, "We're building AI compute capacity at scale faster than anyone else."
Valuation and Market Context
At Friday's close, SpaceX's estimated equity value stood at approximately $1.755 trillion, based on 13.182 billion economic shares. With net cash of about $60.6 billion in June, the enterprise value is roughly $1.694 trillion. The annualized second-quarter revenue suggests an enterprise value-to-sales ratio of 54.2 times, and on an annualized adjusted EBITDA basis, the figure is 119.7 times. These calculations, derived by multiplying one quarter's results by four, are preliminary and do not represent company guidance.
The stock's performance on Friday outpaced the broader market, with the S&P 500 gaining 0.62%, while SpaceX outperformed by 15.2 percentage points. This rally halted a streak of four consecutive weekly losses. The rebound also resolved an immediate issue related to the increased tradable supply, but the broader valuation debate remains unsettled.
Analyst Outlook and Peer Comparison
Analyst recommendations remain largely optimistic, though targets vary widely. Morgan Stanley (NYSE:MS) maintains an Overweight rating with a $300 target, implying 125.4% upside. Oppenheimer (NYSE:OPY) has an Outperform rating with a $250 target, while Cantor Fitzgerald and Bank of America (NYSE:BAC) have Overweight and Buy ratings with targets of $246 and $235, respectively. Argus Research increased its rating on Friday to Buy with a short-term price target of $160. Piper Sandler (NYSE:PIPR) is Neutral with a $140 target, implying just 5.2% upside. It is worth noting that Morgan Stanley acted as an underwriter for the IPO, a fact that may be relevant when evaluating its target.
Compared to other publicly traded space and satellite companies, SpaceX's valuation is substantial. Its equity value is roughly 23 times the combined market capitalizations of Rocket Lab USA (NASDAQ:RKLB), AST SpaceMobile (NASDAQ:ASTS), and Iridium Communications (NASDAQ:IRDM). This disparity heightens the impact of any launch delays, softer pricing, or unmet AI objectives.
Operational Activity and Risks
Operations continued over the weekend, with Falcon 9 deploying 24 Starlink satellites from Vandenberg on Saturday. The next Starlink launch is scheduled for Tuesday, and Globalstar (NASDAQ:GSAT) has a mission set for August 15. Investors are monitoring insider-sale disclosures, as the potential float could approach 40% of total shares by December 8.
Key risks include additional unlock selling, which could increase supply pressure; Starlink's reduced prices may dampen margin expansion; capital expenditures could remain around $18.4 billion for two quarters; and delays in launches, regulation, or AI contracts could challenge the valuation argument. The upcoming earnings report from the Tema Space Innovators ETF (NYSEARCA:NASA) is also on investors' radar, as it may provide additional sector context.
