Morningstar values SpaceX at $780B, half its IPO target

artwr

That's going to be interesting to see if others follow this as an anchor or buy more into the hype. Regardless it's still a large multiple of earnings...

Sidio

As is the case with Elon's companies (and a bit of the market itself), it feels like any logical valuation has no impact on the actual stock price.

snihalani

While I love this, Morningstar isn't a fiduciary

Devasta

Doesn't matter, as soon as they can they'll shove it into the indexes, meaning pension funds all over the world will be let holding the bag.

outside2344

Which is still 10x what it is worth

dig1

IMHO, still too much. Someone posted this link [1] recently. [1] https://www.youtube.com/watch?v=IHD8BDFYyGI

ChrisArchitect

Related: Michael Burry says neither SpaceX nor Anthropic is worth $1T https://news.ycombinator.com/item?id=48368187

jmyeet

So I don't fundamentally care if SpaceX is overvalued or not. Like, that's on you for whatever you want to invest in or not. What I object to is all the rule changes by NASDAQ to essentially fix the IPO so massive pension funds and index funds are forced to invest in it. There have been multiple submissions about this but in short small floats are normally prohibited for index inclusion (not anymore), the trading days required for price discovery have been dropped to almost zero, the voting share structure would be an issue, the insider lockouts have been fixed and on it goes. There should be extra scrutiny for a trillion dollar company. SpaceX does have the Falcon 9, which is the completely dominant launch platform and first-stage reusability gives it an almost unbeatable advantage. Starlink has a lot of potential if satellite handsets can get small and cheap enough to compete with 5G effectively. Obital data centers are bullshit. Starship is going to be a significant drain on finances and the program as a whole faces significant headwinds. The big problem is xAI. It's a significant drain on SpaceX (costing allegedly $1B+/month). SpaceX would be a better company without it. But it's only there to rescue Elon from his disastrous Twitter purchase and the xAI investors from Elon's first bailout (of himself). There's almost no point in trying to figure out what a valuation should be because in many cases, nobody cares. Tesla is the posterchild for that.

kklisura

Man I'm so eager to find out how all this unfolds and when does the music stop for Elon and his shenanigans.

RoddaWallPro

I want to buy options against QQQ so badly -- but Tesla has traded at a crazy multiple of revenue/profits for a very long time, so I'm wondering if Elon/AI hype will keep these stocks high longer than I want to pay the risk premium for (options).

pandoro

The other day I was thinking: "if Musk disappears tomorrow would the valuation still be in the same ballpark?". I don't think so at all. In this context, it feels like even 150 Billions would be a big stretch considering revenue and forecasts. The coming IPOs and numbers are completely detached from reality and we are all in for a crash that will make 2008 look like a walk in the park.

deaton

Honestly this sounds about right for an innovative spaceflight/ISP company saddled with a failing AI lab and a toxic social media website.

cmiles8

There’s simply no version of financial reality that values this company at over 1T. Even 780B is extremely generous based on the current financial picture and a very optimistic view of the future. The AI IPOs are broadly in the same ballpark, and if they IPO at less than the last private valuation (a real possibility absent a perfect setup) that triggers a whole bunch of other messes. The window to get all these things closed before it all comes crashing down is closing, hence the sudden rush to IPO.

erulabs

While I agree with the sentiment that SpaceX today is not worth anywhere near 1T+, it's worth understanding that: a) SpaceX is currently trading at ~>1.5T in secondary markets and b) most of what the market is reacting to is the _chance_ that SpaceX goes on to become one of the largest companies in the world. Remember the reaction when Facebook IPOed? It was hilariously overpriced (at the time, on paper, based on existing revenues) and yet here we are. A 1% chance of earning a trillion dollars is worth 10B - SpaceX can more accurately be thought of as a 10% chance of earning 10T rather than a nominal everyday business.

started_green

Musk fanboi here. If the bait and switch of xAI quotas continue, I would not expect their inference services to succeed. Before getting SuperGrok I had a premium subscription. After forking over $300 payment (annual) for SuperGrok, my quota was drastically cut immediately. As soon as I paid. This is for going from premium ($8 / month) to Super; the way cheaper premium counterintuitively had a much higher quota. Much. Versus $30/month, SuperGrok has a much lower quota and it’s been getting worse, even as xAI has surplus inference capacity to sell to Anthropic. I want Premium back, but I fear they have cut it back. To talk numbers: 35 videos every 90 minutes in premium versus after paying $$, around 30 videos per DAY in “Super” lol Grok. Granted a paltry 10 or so… it varies… of the videos are higher resolution than premium but that doesn’t matter because premium had unlimited upscaling, now gone. I’ve complained. Silence. Do not, do not, subscribe to xAI services.

anonymousiam

I waited for the Google IPO, but did not pre-order. I looked at the price on the first day of trading and decided it was overvalued (at about $100.00). GOOG today is worth about 200x the IPO price, so I guess I was wrong...

yalogin

Well let’s brace for a bunch of tweets against morningstar from the man in charge. I don’t think it matters to the retail investors though, they would all pour money into it. At least that’s my guess

dude250711

$7.8B would be a very fair valuation.

mrandish

This exposes a fundamental (and obvious) problem with not just SpaceX but the OAI and ANT IPOs as well. Their valuations are massive far beyond what the existing GAAP revenue and profit can justify, forcing large percentages of the valuation to rely on multiple future events not only happening but happening on the upper-end of any reasonable probability curve based on real-world priors. While all IPO valuations rely on forward-looking expectations, IPOs this large don't usually rely this much , on this many forward expectations for which there are so few real-world comps or priors to inform estimates. In short, when the error bars are in danger of swamping the signal, wild swings are likely. I expect more than one of these three to drop at least 10% relative to the overall market at some point in their first 18 months. All the potential upside (and probably much more) is already priced in. So taking this bet at the IPO price requires valuations most worry are already too high not only being correct but too low by quite a lot. To paraphrase Alice in Wonderland, these valuations require 'believing as many as six unlikely things before breakfast.' That said, I'll also predict that one of them will be trading >50% higher than its first year low ten years later (vs the overall market). Basically, they are all hugely overvalued in the ~3 year time frame but one may turn out to have been undervalued in 10 years. So, regardless don't buy any of them at IPO. If you're interested in one or more of them, wait for it to drop >10% vs the market and then re-evaluate for early indicators it might be 'the one'.