SpaceX Is Back Trading Near Its Opening-Day Price. History Says Shares Will Be Worth This Much in 1 Year.

Space Exploration Technologies (NASDAQ: SPCX) completed its long-awaited initial public offering (IPO) in June. SpaceX stock opened on the Nasdaq at $150, delivering an immediate 11% lift from the offering price of $135. The company ultimately raised about $85.7 billion, far above the previous record set by Saudi Aramco.

In the days that followed, shares of SpaceX continued climbing -- closing the first session near $161 and briefly touching an intraday high of more than $225 shortly thereafter. The initial enthusiasm, however, was fleeting. Subsequent trading sessions came with selling pressure as early momentum faded and valuation questions mounted.

As of this writing (Aug. 17), SpaceX stock has rebounded to its first-day trading range of about $150. This trajectory underscores a familiar pattern among high-profile IPOs: An opening-day pop driven by scarcity and narrative, followed by a period of price consolidation in which reality and expectations start to align.

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How do IPO stocks typically perform?

During the past 15 years or so, there have been a number of major technology IPOs that show a consistent pattern of significant drawdowns during the first year as a public company. Across a cohort of roughly 30 companies, the median maximum share price decline within the first 12 months of being public was 54%.

Facebook (now Meta Platforms) experienced a peak-to-trough decline of 54% in its first year as a public company. Uber fell as much as 68%. Airbnb held up better on a relative basis, yet still retreated 39% at its worst point. Even eventual long-term winners such as Shopify and Snowflake endured declines in the mid-50% range before recovering.

These figures are not outliers. Rather, they represent a typical experience for heavily hyped IPO stocks once the initial liquidity event ends and lock-up expirations, earnings scrutiny, and competitive realities take center stage.

Where is SpaceX stock headed over the next year?

Applying the same historical trends to SpaceX stock points to a wide range of plausible outcomes over the next year. Across the cohort mentioned above, the median one-year return from the IPO price stood at negative 9%, while the average return was 14%. The maximum declines, in contrast, represent a worst-case peak-to-trough scenario.

Under the median-return path, shares would finish their first year at about $135. In contrast, the average-return path would propel them closer to $170. In a more severe case that mirrors the historical maximum-drawdown experience, SpaceX stock could temporarily bottom at about $100, or even about $70 if measured from today's levels.

Taken together, these scenarios imply a realistic 12-month trading range between $100 and $170. Even at the lower end of this band, SpaceX would still boast a frothy enterprise value, since the business is still scaling revenue and hemorrhaging cash.

Is SpaceX a good investment right now?

It's important to understand that none of the historical analogies explored above are guaranteed. Markets can and often do reward exceptional execution, and SpaceX's vertical integration featuring regular rocket launches, Starlink growth, and artificial intelligence (AI) ambitions is unique.

In my eyes, a more probable near-term path for SpaceX stock will involve continued volatility as the first major lock-up agreements expire, letting insiders and early investors sell their shares, and the company works to prove that its AI and space-based compute initiatives justify a premium valuation.

Against this backdrop, I think smart investors are better served waiting for a more attractive entry point, rather than buying into momentum at current levels. SpaceX stock has already shown how quickly early gains can evaporate. Patience for a deeper consolidation offers both a lower valuation and a clearer view of whether the underlying business can convert its inspiring narrative into durable free cash flow.

Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, Meta Platforms, Shopify, and Snowflake. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.