TLDR
- SpaceX (SPCX) stock trades at $147.96, up 1%, ahead of third-quarter earnings after the close on Tuesday.
- Deutsche Bank expects $12.6 billion in revenue, up 127%, with AI bringing in about $6 billion.
- Analyst Edison Yu rates SPCX a Buy with a $235 target, about 59% above the current price.
- Capital spending is forecast at $19 billion, which would push free cash flow to negative $14 billion.
- Of 35 analysts, 28 say Buy, and the average target is $217.50.
SpaceX (SPCX) stock traded at $147.96 on Tuesday, up 1% on the day. The company reports third-quarter earnings after the market closes.
Space Exploration Technologies Corp., SPCX
October has been choppy for the stock. It has swung in both directions but is close to flat for the month.
Investors are trying to weigh growth plans against the billions needed to fund computing. That makes this report one to watch.
This is SpaceX’s second earnings report as a public company. The call was scheduled only a few days ago, which is unusual.
Morgan Stanley analysts noticed the short notice. “We do not have a good answer at this time,” they wrote.
What Deutsche Bank Expects
Deutsche Bank analyst Edison Yu rates SPCX a Buy with a $235 price target. That implies about 59% upside from current levels.
Yu forecasts revenue of $12.6 billion, up 127% from a year ago. He sees gross margins near 59% and EBITDA above $6.6 billion.
He expects results to mostly match Wall Street estimates. Stronger profit is possible, he said.
AI should drive much of the growth, with about $6 billion in revenue from that segment. That would be nearly triple the prior quarter, helped by the first full quarter of cloud hosting.
Yu says the stock now trades more like an AI name than an aerospace one. That leaves it sensitive to news from the tech sector.
On Starlink, Yu estimates 13.5 million broadband subscribers, up from 12 million in June. Revenue per customer may slip $2 to $64, but connectivity sales could rise 60% to nearly $5 billion.
Spending and Street Views
Yu projects capital spending of $19 billion, mostly for computing. He sees capacity reaching 1.8 gigawatts.
Last quarter, capex was $18.4 billion, up from $2.8 billion a year earlier. Spending also covers the Terafab chip project and the new Starship rocket.
Of the 35 analysts covering SPCX, 28 say Buy, 5 say Hold and 2 say Sell. The average 12-month target of $217.50 implies 47% upside.
SpaceX is taking in billions of dollars each month from customers including Anthropic and Google. Questions remain about how fast it can expand and how many new customers have signed up.
Merger talk with Tesla continues after Tesla showed a Roadster with SpaceX rocket thrusters last week. Last week, Musk and the White House also blamed each other after Ukraine’s military said its Starlink use was throttled.
Tesla reports its own quarterly results on Wednesday, one day after SpaceX.
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