Could SpaceX Hit $900? Wall Street Outlines Bullish Scenario

Barron's reports that Wall Street is bullish on SpaceX (SPCX-US). Currently, the average target price set by market analysts for SpaceX is around $240 per share, equivalent to a company valuation of approximately $3.2 trillion—surpassing Microsoft (MSFT-US), Amazon (AMZN-US), and even Tesla (TSLA-US).

While this valuation is already astonishing, some analysts believe SpaceX's potential value could be far higher. The highest target price seen by Barron's comes from Citigroup. Analyst John Godyn assigns SpaceX a 'Buy' rating with a $200 per share target, but he suggests that in the most optimistic scenario, SpaceX's stock could reach $900.

On Thursday, SpaceX's stock was still far from this target. It rose 2.6%, closing at $152.16, ending a three-day losing streak.

Godyn wrote earlier this week in a report, 'We view the current $200 target as merely a milestone on the path to over $900. Once key engineering technologies are validated at scale, a stock price above $900 becomes a reasonable scenario.'

'If Starship is ultimately successfully deployed, it will establish the lowest-cost, most scalable pathway to unlock the potential of the space economy.'

Starship is undoubtedly SpaceX's biggest secret weapon. This large, fully reusable rocket is still in the testing phase. If successfully developed, it could drastically reduce the cost of launching payloads into orbit—from thousands of dollars per kilogram today to just hundreds or even tens of dollars.

Lower launch costs will be key to creating enterprise value and enabling new business models, such as SpaceX's satellite broadband service, Starlink. Starlink currently has over 10 million subscribers and boasts a gross margin exceeding 60%.

According to Godyn's bullish scenario, SpaceX's enterprise valuation could reach approximately $12 trillion. Morgan Stanley analyst Adam Jonas holds a relatively more conservative view. His target price for SpaceX is actually higher at $300 per share, but his bullish scenario only reaches $600.

Jonas's bullish assumptions rely on everything progressing smoothly: Starship launching commercial operations by 2026, Terafab semiconductor factory mass-producing chips, and orbital AI satellites being deployed successfully.

He also presents a bearish scenario, suggesting SpaceX's stock might be worth only $75. This scenario assumes Starship won't achieve commercialization until 2029, with other business lines progressing slower than expected.

Although the two analysts differ in their valuations, they both agree that Starship will be the key determinant of SpaceX's future value. The reason is that it could enable many solutions previously limited to Earth to be executed in space at much lower costs, opening up entirely new business models.

Cantor Fitzgerald analyst Colin Canfield also presents his own bullish and bearish scenarios, but his valuation method is relatively straightforward, primarily based on earnings per share (EPS) and price-to-earnings (P/E) ratios. His bullish case assumes an EPS of about $11 in 2030 and a market P/E of 100x, resulting in a discounted present value of approximately $740 per share.

In the bearish scenario, he assumes an EPS of about $8 in 2030 and a market P/E of only 20x, leading to a discounted present value of around $100 per share.

The wide divergence in analysts' views on SpaceX's future highlights significant uncertainty, suggesting investors may continue to face high stock price volatility.

This is not surprising, as the market expects SpaceX will not be profitable by 2026. According to FactSet, the company is not expected to turn a profit until at least 2027. However, due to massive capital expenditures required over the next several years, SpaceX's free cash flow is expected to remain negative, meaning it will likely continue to rely on debt and equity financing to fund growth. This could prompt analysts to revise their earnings estimates, target prices, and investment ratings.

Regardless of the final outcome, one thing is almost certain: the investment journey for SpaceX will be filled with extreme volatility.