Key Takeaways
- SpaceX (SPCX) shares declined 0.4% during pre-market hours Thursday following skeptical analyst commentary
- Daiwa Securities initiated coverage with a Hold recommendation and set a $175 target price
- Kailash Concepts highlighted the company’s approximately 100x trailing revenue multiple as potentially problematic for future returns
- Shares have retreated roughly 22% from their highest levels following the initial public offering
- Expiring lockup restrictions on insider shares could introduce additional selling pressure in coming months
Shares of SpaceX edged lower in early Thursday trading, declining to $157.54, as a pair of analyst reports questioned the sustainability of the company’s elevated market valuation.
Space Exploration Technologies Corp., SPCX
Jonathan Kees of Daiwa Securities initiated coverage on the space company with a Hold recommendation alongside a price objective of $175. While not a negative call, the neutral stance suggests limited upside from current levels.
More pointed concerns emerged from Kailash Concepts, an investment research organization that combines quantitative metrics with traditional fundamental examination. Their assessment pulled no punches.
Kailash emphasized that SpaceX currently commands approximately 100 times its trailing revenue — a multiple they characterize as problematic. Their historical analysis indicates companies valued above 10 times sales underperform the S&P 500 about two-thirds of the time over a three-year horizon and typically decline more than 30% on a relative basis versus the broader index.
“To state the obvious, 100 times sales is a valuation that is ten times higher than 10 times sales,” the research firm stated.
With 13 Wall Street analysts now tracking SpaceX, seven maintain Buy ratings on the shares. Target prices span from $165 up to $310. Significantly, the major investment banks that underwrote the offering have not yet published their research — those reports remain several weeks out.
Historical IPO Performance Patterns
SpaceX executed the largest initial public offering on record, with shares surging 19% during the debut session — perfectly matching the historical average for first-day IPO pops dating back to 1980, per data from University of Florida professor of finance Jay Ritter.
However, the subsequent trading action has been less favorable. Data examining the 15 largest U.S. initial public offerings since 2006 reveals that shares dropped approximately 50% from their offering price at some juncture during year one. Average first-year performance for this cohort showed losses around 33%.
The stock has already pulled back about 22% from its highest point. Should it track the historical precedent, additional downside may materialize.
One potential catalyst for strength: SpaceX will be added to the Nasdaq-100 Index following the close on July 6, 2026. Index inclusion typically generates purchasing activity from exchange-traded funds and passive investment vehicles required to mirror index composition.
Insider Lockup Expirations Approaching
The more significant near-term headwind for shareholders may emerge following quarterly results.
After SpaceX reports second-quarter financial performance, anticipated around mid-August, company insiders will gain the ability to liquidate 20% of their eligible shareholdings. This percentage increases if shares trade at minimum 30% above the IPO price during five of any 10 consecutive sessions prior to the Q2 announcement.
Additional time-dependent lockup releases allow insiders to divest up to 7% of holdings at 70, 90, 105, 120, and 135 days following the IPO. Post-Q3 earnings, another 28% could become available for sale.
Kailash additionally referenced Elon Musk’s historical execution timeline, observing that Tesla’s autonomous driving commitments materialized substantially later than original projections suggested. They characterized SpaceX’s $2.2 trillion market capitalization as dependent primarily on the ambitious plan to deploy as many as one million orbital artificial intelligence data center satellites in low Earth orbit within a two-to-three-year timeframe.
SpaceX recorded $18.7 billion in total revenue during the previous fiscal year. The company declined to provide comment when contacted.
