Space Exploration Technologies (NASDAQ: SPCX) \u2014 or SpaceX \u2014 stock fell more than 10% in early trading Wednesday (5 August), following the company’s first quarterly earnings report. That put it around 17% below the $135 IPO price, and a full 50% down on the $225 peak it reached in the strongly-hyped first week of trading. <\/p>\n
The results come as a SpaceX rocket part has just crashed on the moon. That crash was expected, unlike what’s happened to the stock so far. And there might be worse to come, if the most bearish analysts turn out to be right. I asked ChatGPT to dig them out for me, though this was just a bit of fun and do be sure not to rely on AI bots for investing decisions\u2026 <\/p>\n
The results look good! <\/p>\n
Before I look at what the experts think, what did the results actually look like? Impressively strong, judging by the headlines, with revenue hitting $7.8bn \u2014 up 92% compared to the same quarter a year previously. <\/p>\n
The company saw its net loss slashed from last year’s $1bn to $541m. That was helped a lot by the current jewel in the crown, Starlink, which saw subscriber numbers reach 12 million. <\/p>\n
So why the negative market reaction? Well, we saw over $18bn capital expenditure (capex), mostly AI-related. It was massively more than the $2.8bn in the same quarter last year. <\/p>\n
CFO Bret Johnsen told us to expect similarly high capex in the next two quarters. And that can take the shine off a stock in investors’ eyes. <\/p>\n
So what do the bears say? <\/p>\n
Low-end broker targets come in around $60 to $65. In the middle of that range at around $62, it would mean a 54% drop from the IPO price, and a staggering 72% crash from peak. The bears seem to be worried that the current price assumes no setbacks for SpaceX. <\/p>\n
That means Starship reaching commercial reusability, and orbital data centres being in place, in an optimistic timescale. But I suspect most of the stars a lot of investors are seeing right now are in their eyes. And I think it could be a fair bit longer than many expect before those realities come true. <\/p>\n
CEO Elon Musk isn’t joking every time he tells us “space is hard”. I just don’t think everyone really understands quite how hard. <\/p>\n
Brighter hopes <\/p>\n
At the other end of the scale, financial services firm Raymond James has a sky-high $800 target on SpaceX stock \u2014 more than three times the highest it’s been so far. Others are bullish too, if not quite as enthusiastic as that. The consensus stands around $220, close to June’s peak. <\/p>\n
I side with those who think SpaceX looks overvalued at the moment, but I might be wrong and the bulls might be right. However, I do foresee a time when I’ll be eyeing up SpaceX as a long-term buy. I just think investors should consider playing the wait-and-see game for a while. <\/p>\n","protected":false},"excerpt":{"rendered":"Space Exploration Technologies (NASDAQ: SPCX) \u2014 or SpaceX \u2014 stock fell more than 10% in early trading Wednesday…\n","protected":false},"author":2,"featured_media":130398,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[580,25377,157,65251,40909,25221],"class_list":["post-130397","post","type-post","status-publish","format-standard","has-post-thumbnail","category-openai","tag-chatgpt","tag-ipo-price","tag-openai","tag-quarterly-earnings-report","tag-space-exploration-technologies","tag-spacex-stock"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/130397","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=130397"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/130397\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/130398"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=130397"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=130397"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=130397"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}