Wall Street Thinks SpaceX Is a Buy. Here's Why I'm Not So Sure
Valuation matters.
Overview
Space Exploration Technologies (NASDAQ: SPCX) has been a hot topic on Wall Street since it went public in June in what was the largest IPO in history. Many analysts are quite excited about the company's prospects. SpaceX's one-year average price target, according to Yahoo! Finance, is $222.32 (as of writing), which implies a 58% upside from current levels. Price targets run as high as $450. That's quite ambitious for a company that, since going public, has actually declined from its $150 opening price. Despite Wall Street's optimism, I am rather skeptical that SpaceX can deliver such outstanding returns over the next year.
Image source: The Motley Fool.
SpaceX's business encompasses artificial intelligence (AI), satellite-based internet services, and spacecraft launch services. The company has made meaningful progress across all three segments this year. Let's start with Starship, the company's next-gen, fully reusable rocket. Starship is still in testing, and in late July, SpaceX conducted its 13th successful test flight. Starship is central to SpaceX's space ambitions.
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Originally published at www.fool.com.