I Still Think SpaceX Stock Is Too Expensive. Its New Forecast Makes It a Much Closer Call.

SpaceX (NASDAQ:SPCX) posted third-quarter results on Oct. 20 that showed revenue up 161% year over year to $14.6 billion. But the bigger story was the guidance. Management expects quarterly revenue to more than double by early next year.

"We now see total company revenues in the range of $33 billion to $37 billion for Q1 of 2027," chief financial officer Bret Johnsen said on the company's third-quarter earnings call.

Shares closed at about $148 on Oct. 20, before the report, then jumped about 8% in after-hours trading to roughly $160. Even after that jump, the stock is about 24% below the record $211.39 it closed at in June.

I've thought SpaceX stock was too expensive for a while, and this guidance makes that a much closer call.

Image source: The Motley Fool.

SpaceX's growth is picking up

Showing how fast the business is scaling, SpaceX's revenue was $4.7 billion in the first quarter of 2026, $7.8 billion in the second quarter, and $14.6 billion in the third. Sequential growth rose from 66% to 87% over that span.

Most of the gain came from the super intelligence segment (SpaceX's artificial intelligence unit, which rents computing capacity to other companies and sells its own models and software). Its revenue almost tripled from the second quarter's $2.6 billion to $7.6 billion, including $608 million from Cursor, the coding-software company SpaceX bought in August. This made the segment over half of the company's sales.

Even without Cursor, total revenue still grew around 79% from the second quarter.

The profit lines turned, too. Operating income was $2.8 billion, up from a $273 million loss a year ago and a $143 million loss in the second quarter. And net income came in at $4.4 billion, versus a $1.1 billion loss in the year-ago quarter, but around $1 billion of other income and a $390 million tax benefit helped.

What does the guidance do to the valuation?

Before the report, SpaceX stock traded at over 80 times its sales in the 12 months through June (about $23 billion).

The third quarter alone changed that a lot. Swapping a $5.6 billion quarter in 2025 for a $14.6 billion one pushes trailing-12-month revenue to about $32 billion. Even at around $160 a share, which values SpaceX at about $2.2 trillion, the stock is priced at about 68 times sales.

If SpaceX reaches its first-quarter range, that revenue would come to $132 billion to $148 billion on an annualized basis. Measured against that run rate, the stock costs about 15 to 16 times sales -- arguably a fair sales multiple for a business growing so fast.

The guidance doesn't look like a stretch on its own terms, either. Hitting $33 billion or more two quarters after a $14.6 billion quarter takes around 50% to 60% sequential growth a quarter, which is slower than the 87% pace SpaceX just posted.

The spending comes first

Management sees fourth-quarter capital spending of $35 billion to $40 billion, almost twice the third quarter's $19.6 billion.

SpaceX's cash and marketable securities dropped to around $90 billion on Sept. 30 from $100 billion on June 30. And the fourth-quarter spending plan alone is around 40% to 45% of that.

Of course, the run rate also depends on what SpaceX can charge for compute. CEO Elon Musk said on the call that SpaceX rents its compute at around spot-market prices instead of signing long-term deals, and that its short-term contracts are renewing at higher prices. But revenue priced near spot rates might drop about as fast as it climbed if compute gets less scarce.

Also, SpaceX expects only around $42 billion of its $63 billion backlog to become revenue in the next year. Compared with a guided first quarter of $33 billion or more, that suggests much of the future growth isn't locked in by contracts yet.

Is SpaceX stock still too expensive? I think it is, but by a lot less than before the report. At 15 to 16 times the sales run rate management is guiding to, the price no longer assumes something far-fetched. It does assume the first quarter lands in that range, that compute prices hold up, and that over $80 billion of capital spending this year pays off fast.

I'd want to see SpaceX post a quarter in that range before buying at this price.

Daniel Sparks and his clients do not have positions 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.