Key facts
- SpaceX's post-IPO quiet period concluded, leading to analyst coverage initiation.
- Eighteen out of nineteen Wall Street firms assigned buy ratings to SpaceX.
- MoffettNathanson analyst Julie Zhu was the sole outlier, issuing a neutral rating.
- Zhu's 12-month price target of $131 was the lowest among initiating analysts and below SpaceX's closing price.
- Concerns were raised regarding SpaceX's projected total addressable market and Starlink segment forecasts.
- Regulatory scrutiny was identified as the primary risk facing SpaceX.
SpaceX's post-IPO quiet period ended Tuesday, with most Wall Street analysts initiating coverage with buy ratings. Out of 19 firms, 18 issued a buy rating, while MoffettNathanson analyst Julie Zhu maintained a neutral stance with a $131 price target, the lowest among all firms and below SpaceX's closing price of $149.47.
Zhu's research note identified concerns regarding SpaceX's ambitious total addressable market projection of nearly $30 trillion, which the firm described as "absurd." Additionally, she cited overly optimistic forecasts for the Starlink wireless-phone segment and the feasibility of launching the amount of compute Elon Musk desires into space.
However, the firm also acknowledged SpaceX's near-monopoly in the rocket business, with Blue Origin years behind, and noted that the space business acts as a "flywheel" for the company, providing cost advantages for Starlink. Zhu emphasized the space business as the origin of SpaceX's success, enabling rapid iteration due to existing international workloads and market potential.
Looking ahead, Zhu identified regulatory scrutiny as the most significant risk for SpaceX, drawing parallels to antitrust actions against Big Tech companies that leveraged monopolies through vertical integration. The timing of such disruptions remains theoretical and difficult to predict, contributing to Zhu's neutral rating.
Other Wall Street firms expressed strong bullish sentiment. Goldman Sachs set a $205 price target, citing SpaceX's positioning across space, connectivity, and AI markets. JPMorgan highlighted SpaceX's track record of leveraging capabilities to unlock new markets, while Morgan Stanley pointed to its near-monopoly launch economics, satellite network, and AI infrastructure business.