TLDR
- Pivotal Research initiated coverage on SpaceX (SPCX) with a Buy rating and a $220 price target
- The investment thesis hinges on SpaceX achieving Starship reusability of 20 to 50 flights per vehicle
- SPCX trades at $147.95, around 34% below its 52-week high of $225.64
- Quarterly revenue jumped 92% year over year to $7.81 billion, beating analyst estimates
- A share unlock on September 9 is the most immediate near-term risk for the stock
SpaceX (SPCX) stock is trading at $147.95, roughly 34% below its 52-week high of $225.64, but that gap hasn’t stopped Wall Street from warming up to it. Pivotal Research is the latest firm to initiate coverage, slapping a Buy rating on the stock with a $220 price target.
Space Exploration Technologies Corp., SPCX
The firm’s case is straightforward: everything depends on whether SpaceX can make Starship reusable. Specifically, Pivotal wants to see 20 to 50 flights per vehicle with cheap, fast refurbishment between launches. The analyst called this “a single admittedly massive engineering bottleneck.” Get it right, and the upside is enormous. Get it wrong, and SpaceX becomes, in their words, “a different and much smaller company.”
That’s a high-stakes bet on a stock already sitting at a $2.01 trillion market cap.
The most recent quarterly numbers gave bulls something to cheer about. Revenue came in at $7.81 billion, up 91.9% year over year, and earnings per share of -$0.09 beat the consensus estimate of -$0.26 by $0.17. The company generated $23 billion in revenue over the last twelve months with a gross profit margin of nearly 52%.
SpaceX is still loss-making, though, posting a loss of $2.27 per share on a trailing basis.
What Pivotal Sees Beyond Reusability
If the Starship reusability problem gets solved, Pivotal laid out a list of potential opportunities. These include growing Starlink’s capacity to take a slice of the $1.7 trillion terrestrial and wireless market, deploying orbital data centers that bypass terrestrial power grids, and targeting neocloud and hyperscaler customers.
The firm also flagged point-to-point suborbital passenger flights, space manufacturing, defense wins like the Golden Dome project, and space-based power beaming as potential revenue streams by 2030.
Other analysts are equally optimistic. Arete Research has a $450 price target, Oppenheimer raised its target to $280, and Bernstein SocGen reiterated Outperform with a $248 target. The average price target across analysts sits at $221.20, with a “Moderate Buy” consensus.
Goldman Sachs and Guggenheim both carry Buy ratings. Roth Capital upgraded the stock to Buy back in June.
Near-Term Risk: The September 9 Share Unlock
Not everything is bullish. Investors have been keeping a close eye on September 9, when a share unlock takes effect. Newly eligible insider and early-investor supply hitting the market could create selling pressure, especially after a recent rally.
Capital spending is another sticking point. SpaceX reportedly spent $18.4 billion in a single quarter, including $15.8 billion on AI-related expenditure. Critics argue the stock’s multitrillion-dollar valuation already prices in a lot of future success.
Institutional investors have been building positions regardless. Compass Financial Management added a new stake worth $1.63 million in Q2, joining a wave of smaller firms also initiating positions.
Starship Test 14 is approaching, with a potential launch window in mid-September. A successful test would be a meaningful catalyst for the stock.
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