Forget SpaceX's Upcoming Q2 Results. History Says You Should Wait at Least This Long Before Buying SpaceX Stock.
2026-07-31 19:19
•Chris Neiger •The Motley Fool
•••••• •• Axe Cap view
Why Buying SpaceX Stock Now May Be Premature
SpaceX’s lofty valuation and IPO history suggest patience is key before jumping in.
SpaceX's debut on the public markets comes with a warning from history. Large IPOs tend to lag their market benchmarks by around 4% over the first three years. With SpaceX trading at a price-to-sales ratio of 76—far above the typical tech sector average near 9—it's clear the market excitement has pushed the valuation to stretched territory. Add to that the rapid ramp-up in capital spending, especially on AI initiatives that haven’t yet translated into profits, and the risk of disappointing returns grows. For South African investors, this reminds us of previous high-flyers that fizzled post-IPO. Until the company shows steady cash flow or profit growth, jumping in now is more speculation than investment. The local relevance is the South African tech-heavy counters’ caution needed when chasing lofty multiples, something we’ve seen with Prosus and Naspers pivoting away from global tech bets after adjustments in valuation expectations. The main trigger to reconsider could be a marked improvement in SpaceX’s profit visibility, but that’s not on the immediate horizon. this is just our opinion and not financial advice
Avoid buying SpaceX stock for now. Monitor how their capital expenditures convert into tangible profits before revisiting the opportunity.
- SPCX
- USD/ZAR
- Prosus
- Naspers
- SpaceX delivers faster-than-expected profitability
- Global tech appetite revives leading to multiple expansion
6/10
Historical data suggests investors should wait until mid-2027 or later before buying SpaceX stock, despite the company's recent IPO and operational achievements. Large IPOs typically underperform their market index by 4% over three years, and SpaceX's high P/S ratio of 76 (versus tech sector average of 9) indicates overvaluation. Additionally, accelerating capital expenditures in AI investments raise concerns about future returns.
Our take is based on reporting first published by The Motley Fool.