SpaceX Is Down 20%: Here's Why I'm Still Not Buying
2026-07-22 00:05
•Adria Cimino •The Motley Fool
••••••• • Axe Capital view
SpaceX Pullback Isn’t a Buy Signal Yet
Despite a 20% drop, SpaceX’s valuation and spending keep it off my buy list for now.
SpaceX’s early trading slide feels like a gut punch for those chasing the next big tech theme. The company’s ambition to dominate space launches, satellite internet, and AI is undeniable. But let's be honest: burning $20 billion in capital while generating $18 billion in revenue is a red flag, not a bargain. For South African investors, it’s tempting to see parallels with high-growth, capital-intensive firms like Naspers or Prosus. Yet, even these giants are razor-focused on monetization. The USD/ZAR exchange rate adds another layer of caution—any rand weakness inflates foreign costs for local investors holding US dollars or dollar-linked assets. Morningstar’s fair value estimate of $63 versus the current share price around $119 suggests risk remains skewed to the downside. If you want a cheaper way into tech exposure, stick to the more established JSE heavyweights like Naspers or Prosus for now. This thesis could fall apart if SpaceX starts turning stable profits, but until then, I’d rather watch than chase. this is just my opinion and not financial advice
Avoid buying SpaceX on this dip; instead, look to build positions in Naspers or Prosus where valuation and earnings visibility are clearer.
- SPCX
- Naspers
- Prosus
- USD/ZAR
- SpaceX achieves profitability earlier than expected
- Rand strengthens, improving local investor returns
6/10
SpaceX stock has declined below its $135 IPO price to around $119, but analyst Adria Cimino remains cautious about buying despite the pullback. While the company shows promise with its integrated rocket, connectivity, and AI businesses, concerns include high valuation relative to risk, limited visibility, and capital expenditures ($20B) exceeding revenue ($18B). Morningstar's fair value estimate of $63 suggests the stock remains overpriced.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Adria Cimino
Categories: Equities, Earnings, IPOs, Technology, AI, Semiconductors, Financials
Tickers: SPCX
Sentiment: Negative - Despite positive operational achievements (cost reduction, launch records, subscriber growth), the analyst maintains a negative stance due to overvaluation relative to risk, limited financial visibility, and concerning capex-to-revenue ratio where spending exceeds revenue generation.
Keywords: SpaceX IPO, stock valuation, capital expenditures, space economy, satellite internet, rocket launches
Insights:
- SPCX: Negative: Despite positive operational achievements (cost reduction, launch records, subscriber growth), the analyst maintains a negative stance due to overvaluation relative to risk, limited financial visibility, and concerning capex-to-revenue ratio where spending exceeds revenue generation.