Is SpaceX a No-Brainer Buy Below $120? (Hint: The Answer May Surprise You)

Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, has underperformed since its IPO. While the stock initially spiked in the days after going public, it has since sold off and now trades below $120 per share.

For reference, its pre-IPO price was set at $135, and the first price at which investors could access it was around $150 per share.

With it being well below those levels now, investors may be wondering if now is the perfect time to buy the dip on the stock. I think there are many things investors should be aware of, and all of that leads me to conclude that investors are better off waiting a year before diving into SpaceX's stock.

Image source: The Motley Fool.

SpaceX has many events upcoming that could sink the stock more

At its core, SpaceX is really a telecommunications company. Its future may hold something completely different, but its current state is that its Starlink internet service accounted for over half the company's revenue during 2025. Historically, internet businesses haven't been great investments, yet SpaceX is highly valued.

The primary argument is that Starlink is just the first of many offerings of a space economy and that the opportunity is much greater. That's a valid point, but that's still years, if not decades, away from that impacting SpaceX's finances.

What investors must understand is that you're not buying the stock for what the company is now but what it could become years later. That's a hallmark of investing in Elon Musk-led companies, and if you're comfortable with that, SpaceX may be an OK stock to invest in. But if you're not, countless other fantastic companies will make incredible returns as well.

Even if you are a believer, staying out of SpaceX may be advisable for at least the next year. The main reason is that insiders still cannot sell shares because the lockup period hasn't expired for many investors. This will flood the market with new shares, causing the price to plummet.

Second, it's best to get a year's worth of reports out into the public eye. That way, investors can see what the business truly looks like rather than a one-time pre-IPO snapshot.

We'll get a new look at SpaceX's business on its first earnings announcement on Aug. 4. I'll be curious to see what SpaceX says, but it will take a lot for me to start investing, as there are just too many unknowns to warrant investing in it right now.

Keithen Drury 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.