3 Reasons Not to Buy SpaceX Stock Right Now
Patient investors could buy later and make significantly more money.
3 Reasons Not to Buy SpaceX Stock Right Now
Overview
Space Exploration Technologies (NASDAQ: SPCX) debuted as the biggest initial public offering (IPO) ever, and the stock has already had some wild swings. As of this writing, it's up 37% from the IPO price of $135, but it's 18% off its intraday high last week.
I expect further volatility, since the price seems unconnected to the company's fundamentals. Here are three reasons not to buy it today.
The most obvious flaw in the investing thesis is that the stock is astronomically expensive. At the current price, it trades at 125 times trailing-12-month sales. A stock that trades at 125 times earnings is fantastically expensive; the price-to-sales ratio is by definition lower because sales are almost always much higher than net income. In fact, the average S&P 500 price-to-sales ratio is 3.7.
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Originally published at www.fool.com.
