To The Moon

I think $SpaceX(SPCX)$ still has further room to fall.

On August 4, SpaceX will release its Q2 earnings report. Two days later, 910 million shares, valued at approximately $112.5 billion, will become available for trading. After that, more restricted shares will gradually become eligible for sale. By the end of this year, $SpaceX(SPCX)$ tradable shares are expected to increase from the current 639 million to 5.33 billion.

Elon Musk owns 60% of SpaceX's equity. Since the lock-up period for his shares expires one year after the IPO, he is not expected to reduce his stake once the lock-up expires.

The upcoming wave of lock-up expirations has encouraged investors to aggressively short the stock. According to data compiled by S3 Partners, around 30% of the currently tradable shares are shorted, generating profits exceeding $7 billion.

From a price-to-sales (P/S) ratio perspective, SpaceX is currently trading at around 85x sales, significantly higher than leading AI stocks such as $NVIDIA(NVDA)$. However, according to analyst forecasts, SpaceX’s revenue this year is expected to reach $38.6 billion, representing 107% year-over-year growth. Revenue is projected to reach $73.2 billion by 2027.

Based on these projections, SpaceX’s forward P/S ratio could fall to around 28x in a year. Although still high, the valuation would be more reasonable.

By the end of 2027, SpaceX’s P/S ratio could decline further to around 22x, which would still not be considered cheap.

Therefore, SpaceX’s long-term prospects remain strong. The issue is that its IPO valuation is so high that it has already priced in the next two years of expected growth. The company will need time to grow into its valuation.