SPCX Stock Eyes Best Week In Nearly 3 Months — But Analyst Warns Investors May Have To ‘Wait Decades’ To Justify Its Valuation

• Morningstar raised its fair value to $70 from $62, still implying 56.1% downside from Wednesday’s close.
• Clear Street’s $248 target and ‘Buy’ rating imply 56% upside, while Susquehanna’s $176 target and ‘Neutral’ rating imply 11% upside.
• SpaceX beat Q3 expectations, reporting earnings of $0.35 per share versus $0.16 expected and revenue of $14.575 billion against a $13 billion forecast.

Shares of Space Exploration Technologies Corp. (SPCX) are eyeing their best week in nearly three months after a third-quarter (Q3) earnings beat and strong revenue guidance prompted brokerages to raise their targets. But Morningstar warns that investors may be paying for growth that could take decades to justify the stock’s valuation.

SPCX stock closed nearly 8% higher at $159.31 on Wednesday after SpaceX beat Q3 expectations, posting earnings of $0.35 a share versus $0.16 expected and revenue of $14.575 billion against a $13 billion forecast. 

The company projected Q1 revenue of $33 billion to $37 billion, Q4 capital spending of $35 billion-$40 billion and Q4 gross margins closer to Q2 levels.

Morningstar Questions Price Of Musk’s Moonshots

Morningstar raised its fair value estimate to $70 from $62, reflecting the potential benefits of Starship reuse and greater confidence in terrestrial data center expansion, partly offset by reassessed long-term AI investment returns.

Its target still implies a 56% downside from Tuesday’s closing price. At that price, SpaceX’s $1.95 trillion market cap values its shares at 2.11 times Morningstar’s fair value estimate. “The company’s aggressively lofty valuation implies investors will have to wait decades for earnings to grow into SpaceX’s multiples,” Morningstar said.

The firm acknowledged why Musk’s investors may look beyond near-term financial hurdles. “Loyal holders of companies run by Elon Musk have a very long time horizon and are often willing to look past interim milestones toward the prospects of big bets on moonshot projects and the grander vision on the horizon,” it said.    

Clear Street Sees More Growth Beyond Earnings Beat

Clear Street raised its target to $248 from $217, implying 56% upside from current levels, and maintained a ‘Buy’ rating following the stronger-than-expected results and revenue guidance. 

After increasing near-term forecasts, the brokerage said its estimates “remain conservative beyond 2027, leaving room for upward revisions as new capacity comes online and begins generating revenue.”

Meanwhile, Susquehanna lifted its target to $176 from $173, implying 11% upside, while retaining a ‘Neutral’ rating. It highlighted robust revenue growth and margin expansion as compute leasing deals ramp, but flagged aggressive buildout targets and the dependence of the launch and connectivity businesses on successful Starship commercialization.

AI Ambitions Complicate SpaceX’s Competitive Edge

Morningstar recognizes SpaceX’s competitive strength even as it questions the valuation. “SpaceX has transformed the economics of space launch and dominates the market for lifting spacecraft into orbit, and it has a decade lead on most competitors in experience and payload launch volumes,” it said.

SpaceX delivered an estimated 83% of the mass sent into orbit in 2025. Its low internal launch costs also support Starlink’s economics, with Morningstar estimating returns on invested capital in the mid-20% range for the launch and connectivity businesses, above its 9.3% estimated cost of capital.

However, uncertainty over heavy AI investment limits SpaceX’s overall moat rating to ‘Narrow’. Morningstar expects AI to generate a majority of revenue by the end of 2026.

Starship Holds Key To SpaceX’s Biggest Bets

Morningstar forecasts successful reuse of Starship upper stages by late 2028, enabling multiple launches per week and lower launch costs. The stakes extend across satellite connectivity and orbital computing.

“If Starship does not prove to be reusable, however, it would put the company’s economic moat and operational future in doubt, as its V3 Starlink satellites and proposed AI satellites don’t fit in Falcon rockets,” it said. Its $70 base case already assumes viable orbital data centers, with 60,000 computing satellites providing 13 gigawatts of capacity and generating $168 billion in annual revenue by 2035.

In a more aggressive expansion scenario, annual orbital computing revenue reaches $200 billion, but excessive capital spending and falling rental rates leave SpaceX worth just $26 per share, marking an 84% downside. 

Morningstar also flagged a potential increase in shares available for public trading. “In the year following SpaceX’s IPO of just under 5% of its shares, the remaining 95% will become available for sale by insiders to the public, which could test marginal demand and drive volatility in the stock price,” the firm said.

How Do Retail Traders Feel About SPCX?

On Stocktwits, retail sentiment for SPCX jumped to ‘extremely bullish’ from ‘bearish’ levels a week ago amid ‘extremely high’ message volume.

One user said, “$SPCX they killing the options today. Probably spike at close and tomorrow we move back up again”

Another user said, “$SPCX just a typical AI infrastructure company. The valuation is too high just like tesla.”

SPCX stock has slipped 1% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<