SpaceX stock isn’t trading yet, but it has received its first Wall Street coverage. It isn’t an official Buy, but it’s positive.
Wednesday evening, New Street Research analyst Pierre Ferragu launched coverage of SpaceX with no rating and a $165 price target. Having no rating seems appropriate. Investors know the IPO is supposed to price at $135, but they have no idea where shares will trade on Friday.
Still, $165 is up about 22% from the IPO price and seems to justify SpaceX’s massive $1.8 trillion IPO valuation. Ferragu’s price corresponds to a roughly $2.3 trillion equity value.
Ferragu sees 2030 sales of $195 billion in revenue and operating profit of $65 billion, according to ratings aggregators. New Street didn’t immediately respond to a request for a copy of its initiation report.
That values SpaceX at about 35 times estimated 2030 operating profit, making some assumptions for debt and cash generation. Alphabet trades for about 13 times 2030 operating profit estimates.
Alphabet is probably the right comparison. It’s investing heavily into AI, and SpaceX wants to dominate AI by putting data centers in space— CEO Elon Musk believes they will be cheaper to operate than ones on Earth in the near future.
It’s a premium valuation, but SpaceX will presumably be growing faster than Alphabet is in 2030, at least according to New Street. Embedded in the valuation is $650 billion for Starlink products and $575 billion for AI.
If things go well for SpaceX, Ferragu sees shares worth $330.
Wall Street brokers typically have to wait weeks to publish research on IPO stocks. That’s if they are part of the deal. New Street isn’t, which is why Ferragu can publish now.
He is a long-time Tesla bull. Currently, he rates shares Buy and has a Street-high $600 price target for shares. (That’s the same target as Wedbush’s Dan Ives.)
The coverage isn’t a call to buy, but it won’t hurt. Late Wednesday, SpaceX share futures were trading at $163 on Hyperliquid, a cryptocurrency platform for trading perpetual futures—or futures that never expire.
Futures that mirror stock prices don’t seem useful, but futures allow for higher leverage than with basic stock trading. For regular investors, think of Hyperliquid as a useful price discovery tool.
That level aligns closely with Ferragu’s view. Friday’s trading will tell us more.