SpaceX Stock Just Surged 20% Post-IPO: Is Elon Musk's Company a No-Brainer Buy?

Space Exploration Technologies (NASDAQ: SPCX), more commonly known as SpaceX, has made quite the splash since going public a few weeks ago. Although shares were initially offered at $135 per share, trading opened at $150 per share, and the stock is trading around $155 as of June 22. From the price most people could have paid for the new stock, SpaceX already gained more than 20% at last week's peak. The question now is whether SpaceX can resume this run, or if the more recent cooling-off period will persist.

Let's take a look at SpaceX stock and see if it's worth an investment, or if investors should be patient.

Image source: The Motley Fool.

SpaceX has a lot of growing to do

One of the reasons SpaceX's IPO was so historic was the sheer size of it. Currently, SpaceX is the seventh-largest company in the world by market cap, just behind Amazon (NASDAQ: AMZN) and Taiwan Semiconductor Manufacturing (NYSE: TSM). Both of these companies are vital to the world's economies, whereas SpaceX may not have quite the same distinction. There's also the question of whether SpaceX deserves to be ranked among them.

In 2025 (the most up-to-date information investors have), SpaceX's revenue totaled $18.7 billion, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $6.6 billion. Comparing Amazon's and Taiwan Semiconductor's revenue isn't really telling, as the two have very different profit margins. But when you think about each company's EBITDA, it's clear they're in their own class versus SpaceX.

Data source: SEC filings.

As you can see, SpaceX's financials aren't even in the same ballpark. SpaceX is very highly valued, which immediately raises a red flag.

But that's nothing new with Elon Musk's companies. Take Tesla, for example. That has been the strike against it for many years: It's very highly valued for an automobile maker. However, Tesla investors aren't necessarily buying the stock on the expectation that it's just an automaker; they're buying it for its future, which includes robotaxis, self-driving cars, and autonomous robots. If these goals pan out, Tesla could be a logical investment.

SpaceX can be seen in the same light. In reality, SpaceX is a telecom, as the majority of its revenue and profits come from its Starlink service. The rocketry business is more of a side gig at this point. But if SpaceX can grow into a true space exploration company and create significant economic value from it, then the stock may be worth every penny.

As an investor, you need to decide if you want to purchase a stock for its future potential, or if you want to purchase a stock based on the tangible, near-term performance. If you're in the former camp, then SpaceX could be a solid investment from current prices. If you're in the latter group, SpaceX is a stock to avoid.

Keithen Drury has positions in Amazon, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has positions in and recommends Amazon, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.