As SpaceX prepares for what could become the largest IPO in history, Morningstar has delivered a stark warning: the company may be worth less than half of what investors are being asked to pay.
The research firm values SpaceX at roughly $780 billion, compared with the company's planned IPO valuation of about $1.77 trillion. Morningstar argues that SpaceX is "significantly overvalued" and warns that xAI, the company's artificial intelligence division, poses a "material threat of value destruction" due to the uncertainty surrounding its long-term profitability, CNBC reported, citing Morningstar.
That skepticism stands in sharp contrast to the story SpaceX is presenting to investors. The company plans to raise $75 billion by selling around 555.6 million shares at a fixed price of $135 each, an unusual approach for a US IPO. At that price, SpaceX would become one of America's most valuable public companies from day one, according to Bloomberg.
The company's current economics offer support for both sides of the debate. Starlink generated $3.26 billion in quarterly revenue and accounted for 69 percent of total sales. Yet SpaceX still reported a net loss of $4.28 billion, while xAI lost $2.5 billion and the space business remained unprofitable.
SpaceX argues that its opportunity extends far beyond today's earnings. In its IPO prospectus, the company points to a potential $28.5 trillion market spanning artificial intelligence, satellite infrastructure, and future space-based services.
The question facing investors is whether that future justifies paying for it today.
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