I Still Think SpaceX Stock Is Too Expensive. Its New Forecast Makes It a Much Closer Call.
2026-10-22 22:38
•Daniel Sparks •The Motley Fool
••••• • Axe Cap view
SpaceX Valuation Narrows, But Still Too Rich for Now
SpaceX's massive revenue jump and guidance make its pricey stock a closer call, yet caution remains warranted.
SpaceX’s latest results are undeniably impressive, with Q3 revenue soaring 161% year-on-year to $14.6 billion and revenue guidance for Q1 2027 nearly doubling to $33-37 billion. Its super intelligence unit tripling sales highlights the company’s rapid evolution beyond rockets. However, this growth comes at a steep price. The stock trades at 68 times current sales, down from 80, yet still lofty compared to typical tech or industrial firms. Heavy capital expenditure—expected at $35-40 billion next quarter—raises questions about free cash flow and returns. For South African investors, there’s no direct listed proxy, so watch the USD/ZAR: a weaker rand could amplify dollar-based exposure risks. The key concern is pricing pressure in the AI compute market and whether SpaceX can convert its backlog into real earnings. Until we see those translate into sustainable cash flows, I’d prefer to watch rather than jump in. This is a closer call than before, but too expensive for now. this is just our opinion and not financial advice
Avoid buying SpaceX stock for now, but monitor USD/ZAR and Q1 results closely for a potential entry if capital spending and compute pricing risks ease.
- SPCX
- USD/ZAR
- Capital expenditure overruns limiting cash flow
- Volatility in AI compute pricing impacting margins
6/10
SpaceX reported Q3 2026 revenue of $14.6 billion (up 161% YoY) with guidance for Q1 2027 revenue of $33-37 billion. The super intelligence segment nearly tripled to $7.6 billion. While the stock's valuation multiple improved from 80x to 68x sales on current metrics and could reach 15-16x on guided run rates, the analyst remains cautious, citing heavy capital spending plans ($35-40 billion in Q4), dependence on compute pricing holding up, and unfulfilled backlog contracts.
Our take is based on reporting first published by The Motley Fool.