Prediction: within 1 year I’ll be able to buy SpaceX stock below $100

Traders have been scrambling to buy SpaceX (NASDAQ: SPCX) stock since its Preliminary Public Providing (IPO). We will see this in its share value, which has surged as excessive as $226 in current days (versus the IPO value of $135).

I’ll assume there’ll be significantly better shopping for alternatives right here within the months forward, nevertheless. I’m satisfied that within a year, I’ll be able to buy the shares for beneath $100.

A one-of-a-kind firm

There’s little doubt that SpaceX is a tremendous firm. Not solely does it dominate the industrial rocket launch market (it has launched greater than 80% of mass to orbit for the world every year since 2023) but it surely additionally dominates the satellite tv for pc broadband market (it has 10,000 Starlink satellites in operation).

Moreover, it has a fast-growing AI section that has contracts with the likes of Google and Anthropic. After all, there’s additionally CEO Elon Musk, who many see as one of many biggest entrepreneurs of all time.

The valuation is sky excessive

The underside line, nevertheless, is that the corporate’s valuation appears to be like stretched right this moment. On the present share value of $185, the market cap is a whopping $2.4trn.

Provided that income final year was simply $18.7bn, the trailing price-to-sales ratio right here is 128. For reference, Nvidia, Alphabet, Tesla, and Amazon have ratios of 20, 10, 15, and three.5, respectively.

It’s value noting that one main analysis agency believes SpaceX is value nearer to $780bn. That interprets to a share value of $63.

Like me, it believes that buyers can have higher shopping for alternatives within the months forward. Proper now, it sees SpaceX stock as “considerably overvalued.”

These occasions might rock the share value in 2026

Now, shares can stay overvalued for a very long time, in fact (Tesla has regarded overvalued for years). However right here’s the factor – there are a number of catalysts on the horizon that might end in promoting exercise and a decrease share value and valuation.

One is lock-up expirations. Shortly after the corporate’s Q2 earnings (which can be posted in July or August), long-term buyers will be able to promote a major quantity of stock (I think about that many establishments will promote aggressively given the excessive valuation).

One other is the IPOs of Anthropic and OpenAI. I feel it’s very possible that retail buyers will promote SpaceX stock to fund purposes right here.

Quarterly earnings might additionally create some share value volatility. If Starlink subscriber development is disappointing and/or prices blow out massively, buyers could take earnings off the desk.

So, I’m not dashing to buy the house stock right this moment. To my thoughts, shopping for now wouldn’t be wise – the danger/reward profile simply doesn’t look beneficial.

I feel that with a little bit of endurance, I’ll be able to buy the stock at a lot decrease ranges. I actually wouldn’t be shocked to see the stock buying and selling below $100 within a year.

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Edward Sheldon owns shares in Nvidia, Amazon, and Alphabet