SpaceX Stock Keeps Dropping. Here's Why I'm Still Waiting on the Sidelines
SpaceX is currently trading well below its IPO price, but the valuation is still far too rich.
Overview
Space Exploration Technologies (NASDAQ: SPCX) has been on quite a ride since its debut in the public markets in early June. Shares were originally priced at $135, then quickly rose to $225 before tumbling to around $123 as of July 22. For a long-term, fundamentals-focused investor, it's not the volatility that's keeping other investors and me away; it's still the inflated valuation.
Even after more than $1 trillion was wiped from SpaceX's market cap, the company is still inflated at a $1.6 trillion valuation. With less than $19 billion in revenue, that's still close to 85 times sales. A nearly triple-digit multiple doesn't make sense given last year's 33% growth rate. Elon Musk's company is also spending a tremendous amount on capital expenditures, expected to reach $40 billion this year. SpaceX is nowhere near profitable.
Image source: The Motley Fool.
Details
Source
Originally published at www.fool.com.