While nearly every analyst turned bullish on SpaceX after its quiet period ended, one firm is warning that investors may be getting ahead of themselves.
Wall Street officially launched coverage of SpaceX on Tuesday, and the response was overwhelmingly positive. According to Bloomberg, 18 of the 19 firms that initiated coverage gave the company a "buy" rating.
The exception was MoffettNathanson.
Analyst Julie Zhu assigned SpaceX a neutral rating and a 12-month price target of $131, the lowest target on Wall Street and below Tuesday's closing price of $149.47.
Key Details
MoffettNathanson's report questioned several pillars of the bullish case for SpaceX. The firm argued that the company's estimated total addressable market of nearly $30 trillion is far too ambitious and described some assumptions as "absurd."
The report also raised concerns over Starlink's wireless-phone growth forecasts and questioned whether Elon Musk's plans to deploy massive computing power in space can be achieved anytime soon.
Even so, the firm acknowledged SpaceX's strengths. It noted that the company effectively holds a monopoly in the rocket-launch business, with competitors like Blue Origin still years behind.
Zhu said SpaceX's launch business remains the foundation of its success and gives Starlink a major cost advantage.
Market Reaction
Despite the lone cautious view, investor sentiment remained strongly bullish. Goldman Sachs set a $205 price target, JPMorgan sees shares reaching $225, and Morgan Stanley issued the highest target at $300.
Why It Matters
SpaceX's valuation has become one of the biggest debates on Wall Street. For traders, the key question is whether the company's growth plans can justify its roughly $2 trillion valuation.
Investors will now be watching Starlink's expansion, future revenue growth, and any signs of regulatory pressure that could challenge SpaceX's dominance.
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Source: Yahoo Finance
Time: 5:30 PM EEST
