SpaceX Stock Keeps Dropping. Here's Why I'm Still Waiting on the Sidelines
Key Points
SpaceX is trading about $100 per share below its peak of $225 as of July 22.
The company's market cap is still around $1.6 trillion, roughly 85 times revenue.
- 10 stocks we like better than Space Exploration Technologies ›
Space Exploration Technologies (NASDAQ: SPCX) has been on quite a ride since its debut in the public markets in early June. Shares were originally priced at $135, then quickly rose to $225 before tumbling to around $123 as of July 22. For a long-term, fundamentals-focused investor, it's not the volatility that's keeping other investors and me away; it's still the inflated valuation.
Even after more than $1 trillion was wiped from SpaceX's market cap, the company is still inflated at a $1.6 trillion valuation. With less than $19 billion in revenue, that's still close to 85 times sales. A nearly triple-digit multiple doesn't make sense given last year's 33% growth rate. Elon Musk's company is also spending a tremendous amount on capital expenditures, expected to reach $40 billion this year. SpaceX is nowhere near profitable.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: The Motley Fool.
What the company could achieve with its Starlink and rocket business is truly inspiring and exciting. SpaceX acquired Anysphere, the parent company of Cursor, which should add significant revenue. That's a positive for investors, but I'd still like to see more organic growth than purchased growth over the next several quarters.
If SpaceX can show consistent growth and a path to profitability, eventually I'd be more ready to climb on board. However, I still don't feel comfortable buying a company that is years away from its revenue justifying its price.
Right now, the upside for retail investors looks farther away than a colony on Mars.
Should you buy stock in Space Exploration Technologies right now?
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $369,577!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,301,557!*
Now, it’s worth noting Stock Advisor’s total average return is 908% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 24, 2026.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
