SpaceX (NASDAQ:SPCX) has been a massive talking point recently. The company underwent its initial public offering last week (12 June), and its stock has rocketed up since.
In fact, if investors managed to buy its shares at the IPO price of $135, they would have made a 56.4% return already, as they are valued at $211 right now.
Specifically, a £5,000 investment would be valued at £7,814.82 at the moment. That’s a lovely £2,814.82 profit!
However, I’m sure readers care more about how much a £5,000 investment now could be worth in a year.
How’s the business doing?
There’s no doubt that SpaceX has some interesting operations, from space exploration to building AI systems.
But the one segment that caught most of my attention is Starlink, its satellite internet division. Its customers have doubled to 10.3m in the last year. This is pretty impressive, and a reason to be optimistic about the long-term potential of the company.
Starlink is its largest source of revenue, accounting for $11.4bn of its total $18.7bn revenue achieved in 2025. It’s also the only profitable one, generating $4.4bn of operating profit.
However, the rest of the business isn’t so profitable, as the firm made an overall net loss of $4.9bn in 2025.
Looking ahead, analysts expect SpaceX to almost double revenue in 2026 to $34.5bn, and then grow it again by 86.9% in 2027 to $64.5bn. In terms of the loss per share, this is expected to be $0.64 in 2026 and then $0.09 in 2027.
This shows the business is forecast for strong revenue growth and is on a path to profitability. But is it enough to support its lofty valuation?
The valuation is absurd!
If you asked me for my opinion on SpaceX’s valuation, I would say it simply doesn’t make sense.
Right now, the company is trading at a price-to-sales (P/S) ratio of 130.4. This would be expensive if the multiple was just earnings, but it’s sales.
Let’s put things into perspective for a second. The company made $18.7bn in revenue last year and a loss of $4.9bn. And, it’s being valued at $2.5trn?
Yes, revenue is expected to grow strongly. But there are companies with superior revenue, growth, and earnings, valued significantly less than this.
I think most of this is being driven by pure hype, and very little is down to the fundamentals of the business.
Prediction
While I think the business is interesting and could do well, I don’t think it’s valued anywhere near what its market cap currently suggests.
By assigning a P/S of 20 to the company, it should give the company a market cap of $374bn (85.2% less than its current valuation). Bear in mind, a P/S of 20 is still extremely high, so this is the very upper end of what I think SpaceX is worth.
Even if this was its value, there would be an argument to say the company is still significantly overvalued.
However, I think its shares could fall to around this level in a year. Therefore, an investor putting in £5,000 today might only have around £742 next year.
That said, this is only my own prediction, and I could be wrong. But there are plenty of other great growth stocks, sensibly valued, that investors might want to consider instead.
Should you invest £5,000 in Space Exploration Technologies Corp. – Class A right now?
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Muhammad Cheema does not hold any positions in the companies mentioned.
