SpaceX must pull off rocket reusability if the company is to reach a stratospheric market valuation in the not-too-distant future.
“A successful investment case in SpaceX at the current $2 trillion enterprise value rests almost entirely on a single admittedly massive engineering bottleneck: Starship reusability (i.e. 20-50 flights per Starship with relatively inexpensive and quick refurbishment/redeployment),” Pivotal Research Group analyst Jeffrey Wlodarczak wrote in a note on Tuesday. “If Elon Musk can solve for this fundamental issue it potentially drives down the cost of launches to space to the equivalent of terrestrial freight opening up an unarguably massive opportunity.”
Wlodarczak initiated coverage of SpaceX with a Buy rating and $220 price target.
That massive opportunity, Wlodarczak said, includes Starlink taking a material share of the wireless industry and serving as a space monopoly, with others having to pay SpaceX for entry.
“In the end, investors are debating xAI, Colossus, and Starlink take-rates,” Wlodarczak added. “Those matter only after Starship works. Our $220 target is a call on reuse 20–50 flights per vehicle, cheap refurb, fast turnaround. If that is solved, the rest of the model can happen. If it is not, SPCX is a different and much smaller company.”
SpaceX stock continues to trade off its post-IPO lows as the trade has largely stabilized.
Shares have rallied from an intraday low of $104.83 on Aug. 3 up to a close of $147.95 on Sept. 4. SpaceX’s record high stock price is $225.64, hit shortly after its public market debut in June.
Lost somewhat in the bounce off the lows have been the pros and cons in SpaceX’s second quarter and how its performance may look similar in the third quarter.
For one, the company lost a ton of money in its first earnings report as a public company.
Second, SpaceX’s total capital expenditures in the second quarter were $18.4 billion, well above analyst estimates of around $6 billion.
Lastly, the company didn’t provide specific 2026 guidance.
Wall Street has stayed bullish, however. About 80% of the sell-side analysts rate SpaceX a Buy or Strong Buy, per Yahoo Finance AlphaSpace data.
“While the stock remains negatively impacted on elevated capex expectations and questions on how SPCX will monetize its capabilities through AI and Starlink Mobile, we are more positive in SPCX’s positioning across its key markets following 2Q,” Bank of America analyst Ronald Epstein wrote in a note.
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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