SpaceX Stock Keeps Dropping. Here's Why I'm Still Waiting on the Sidelines
2026-07-24 08:11
•Catie Hogan •The Motley Fool
••• • Axe Capital view
Why SpaceX’s Valuation Is Too Rich for Now
Despite its innovation, SpaceX’s sky-high valuation and heavy spending make it a no-go for me.
SpaceX’s recent share price drop from $225 to about $118 might tempt some, but the company remains wildly unprofitable and expensive by any standard. Trading at roughly 85 times sales with a $1.6 trillion valuation on just $19 billion revenue stretches logic. With $40 billion planned annual capital spending and no clear path to profits, the company is still many years away from justifying this price. For South African investors, this means watching the USD/ZAR closely rather than jumping in—volatile dollar strength and risk appetite shifts will dictate when a better entry appears. Keep an eye on tech infrastructure plays with more tangible earnings, like Naspers and Prosus, rather than speculative moonshots. My concern is that enthusiasm for projects like Starlink overshadows the hard numbers. If SpaceX can deliver steady growth and profitability sooner than expected, the story could change, but that’s not the current case. this is just my opinion and not financial advice
Wait patiently and watch how SpaceX manages its spending and revenue growth before considering any exposure. For now, focus on South African tech counters like Naspers or Prosus, where valuations are more grounded.
- USD/ZAR
- Naspers
- Prosus
- Tech sector volatility globally affecting USD/ZAR
- SpaceX achieving profitability earlier than expected
6/10
SpaceX stock has declined from its $225 peak to around $118 following its June IPO, but analyst Catie Hogan remains on the sidelines due to inflated valuation. Despite a $1 trillion market cap reduction, the company trades at approximately 85 times sales with a $1.6 trillion valuation against less than $19 billion in revenue. With $40 billion in expected capital expenditures and no profitability in sight, Hogan believes the stock is years away from justifying its price, despite the company's promising Starlink and rocket businesses.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Catie Hogan
Categories: Equities, Earnings, IPOs
Tickers: SPCX
Sentiment: Negative - The analyst expresses concern about SpaceX's inflated valuation at 85 times sales with minimal revenue ($19B) relative to market cap ($1.6T). The company is unprofitable, spending heavily on capex ($40B annually), and lacks a clear path to profitability. While acknowledging exciting long-term potential with Starlink and rockets, the author recommends waiting on the sidelines until the company demonstrates consistent organic growth and profitability justifying its current price.
Keywords: SpaceX IPO, stock valuation, price-to-sales ratio, profitability, capital expenditures, Starlink, market volatility
Insights:
- SPCX: Negative: The analyst expresses concern about SpaceX's inflated valuation at 85 times sales with minimal revenue ($19B) relative to market cap ($1.6T). The company is unprofitable, spending heavily on capex ($40B annually), and lacks a clear path to profitability. While acknowledging exciting long-term potential with Starlink and rockets, the author recommends waiting on the sidelines until the company demonstrates consistent organic growth and profitability justifying its current price.