- Wolfe Research analysts have initiated coverage on SpaceX stock (NASDAQ: SPCX) with a price target of $175, even as the company’s stock began trading on Friday following the world’s largest ever IPO.
- The stock closed 19% higher at nearly $161, with Wolfe’s price target reflecting the belief that the company’s breaking of the cost curve supports an “out-of-this-world” near-term valuation.
- Wolfe points out that having a near-zero internal space launch cost provides SpaceX with one of the widest moats in history, allowing for 70% top-line growth and a near doubling of EBITDA margins by 2030.
- Wolfe Research stated that reusability is what made it possible for SpaceX to break the cost curve, starting with the Falcon 9 and now even more so with Starship.
- Reusability was described as a game-changer for launch cost economics, providing both market stimulation and improved margins.
- Wolfe Research estimates that full reusability with the Starship would reduce the incremental cost of launch from $14M for the Falcon 9 to under $3-5M for a Starship launch.
- The minimum cost for a Starship launch is set by the $1M/flight in fuel, according to Wolfe.
- Wolfe noted that SpaceX has broken even even before the “big phase” of subscriber growth ahead.
- The connectivity business is expected to reach a key inflection point in 2024, with EBITDA less capital expenditures turning positive.
- Wolfe sees a path for SpaceX to generate more than $90 billion in EBITDA and over $70 billion in EBITDA less capex by 2030, while expanding Starlink’s capacity twelve-fold.
Wolfe Research has initiated coverage of SpaceX stock (NASDAQ: SPCX) with a price target of $175, following the company's record-breaking IPO. The stock surged 19% to nearly $161 on its first trading day, reflecting investor confidence in SpaceX's innovative cost structure.12
Analysts attribute this optimism to SpaceX's ability to achieve near-zero internal launch costs, which they describe as creating one of the widest competitive moats in history. Wolfe Research forecasts that this will enable SpaceX to achieve 70% top-line growth and nearly double its EBITDA margins by 2030.10
The firm emphasizes that reusability has been a game-changer for launch cost economics, particularly with the Falcon 9 and the upcoming Starship. They estimate that the incremental cost of a Starship launch could drop to under $3-5 million, compared to $14 million for the Falcon 9, significantly enhancing profitability.45
Wolfe also notes that SpaceX has already broken even before the anticipated growth phase, with its connectivity business expected to reach a key inflection point in 2024. The firm projects that SpaceX could generate over $90 billion in EBITDA and more than $70 billion in EBITDA less capital expenditures by 2030, while expanding Starlink's capacity twelve-fold.89
“Wolfe Research analysts initiated coverage on SpaceX stock with a price target of $175, citing the company's near-zero internal launch costs. The firm believes this cost advantage will support significant growth and profitability by 2030.”
