Prediction: SpaceX Will Underperform Planet Labs This Year

Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, launched its IPO in June with high hopes. While it benefited from an initial bump, its fortunes quickly reversed, and shares now sell below its original IPO price.

A likely reason for the pullback was the valuation of the communication stock, which remains extremely elevated. This overvaluation is so extreme that Planet Labs (NYSE: PL), which SpaceX has so far outperformed, is likely to earn higher returns (or at least lower losses) for 2026. Here's why.

Image source: The Motley Fool.

The state of SpaceX and Planet Labs

Aside from their involvement in space and satellites, SpaceX and Planet Labs are different companies. Planet Labs uses satellites to create high-resolution maps of the planet daily. In contrast, SpaceX launches rockets and operates a satellite-based internet service.

Admittedly, Planet Labs would likely not be possible without SpaceX, and its infrastructure makes it a larger company. Its $1.6 trillion market cap is far above Planet Labs' $8 billion.

PL data by YCharts

Valuations explain a surprising amount of that difference. As of the time of this writing, SpaceX trades at a price-to-sales (P/S) ratio of 84, far above Planet Labs's 22 sales multiple.

Both exceed the average P/S ratio of 3.7 for the S&P 500 (SNPINDEX: ^GSPC). However, analysts estimate that Planet Labs's revenue will grow at 42% in fiscal 2027, well above the 26% increase in fiscal 2026 (ended Jan. 31). Amid those increases, a sales multiple in the low 20s is not unusual.

In contrast, investors rarely encounter an 84 sales multiple, and one has to wonder whether Elon Musk's track record can justify that valuation. In 2025, SpaceX's revenue grew by 33% year over year, and the forecast of 109% revenue growth in 2026 is a significant increase that makes its valuation more understandable. Still, that also leaves enough potential downside that any hint of bad news could spark a huge sell-off in SpaceX stock.

Planet Labs is not immune to the effects of bad news. Nonetheless, it is in a stronger position to handle it, and that valuation leaves room for a higher multiple if the company exceeds expectations.

SpaceX probably has further to fall

Of the two stocks, SpaceX is the one most likely to suffer more over the course of the year.

Admittedly, Planet Labs' stock has kept going down and has declined more than SpaceX's since the SpaceX IPO. Moreover, neither stock is inexpensive, and it is quite possible that both finish 2026 in the red.

However, one has to question whether any company is worth buying at 84 times sales, a valuation where even an implication of bad news could lead to more selling.

Since a perfect performance is unlikely, investors should expect SpaceX stock to fall further in the near term. Conversely, with Planet Labs facing less pressure, it should either recover or keep its downside in check going forward.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Planet Labs PBC. The Motley Fool has a disclosure policy.