Shares of SpaceX (NASDAQ: SPCX) have given back a significant portion of their early gains following one of the most anticipated public offerings in market history. After debuting at $135 per share on June 12 and climbing to an intraday high of $225.64, the stock has since retreated roughly 32%, recently trading near $153.
The decline naturally raises an important question for investors: Has the pullback created an attractive entry point, or does the stock still reflect overly optimistic expectations?
A Business Backed by Strong Growth
SpaceX’s IPO filing offered investors their first detailed look at the company’s financial performance, revealing a business that continues to grow at an impressive pace.
Revenue increased 33% year over year in 2025 to $18.7 billion, driven primarily by Starlink, which generated $11.4 billion in sales. The satellite internet division accounted for roughly 61% of total company revenue and expanded nearly 48% from the previous year. Starlink also surpassed 10 million subscribers by the end of the first quarter of 2026.
Perhaps more importantly, Starlink has become the company’s primary earnings engine, producing approximately $4.4 billion in operating profit during 2025.
Outside of Starlink, SpaceX generated roughly $4 billion in revenue from its launch services and NASA missions. However, the company continues to invest heavily in developing its next-generation Starship rocket, with spending estimated at around $3 billion.
At the same time, substantial investments in xAI have weighed on overall profitability. Although the artificial intelligence segment generated approximately $3.2 billion in revenue, it remains unprofitable. Including xAI’s financial results, SpaceX reported a net loss of $4.9 billion for 2025.
Valuation Remains Difficult to Justify
Despite the recent decline, valuation remains the primary concern.
With a market capitalization exceeding $2 trillion and a price-to-sales ratio above 100, investors are paying a substantial premium for future growth. Those valuation levels imply that Starlink must continue expanding rapidly while SpaceX successfully commercializes Starship, improves companywide profitability, and absorbs ongoing losses from xAI.
In other words, today’s valuation leaves little room for execution missteps.
Some analysts believe the stock has run well ahead of its underlying fundamentals. For example, Morningstar estimates SpaceX’s fair value at approximately $780 billion, suggesting the shares remain significantly overvalued despite the recent correction.
An Outstanding Company at an Expensive Price
There is little debate that SpaceX owns some of the most valuable assets in the aerospace industry. The company dominates commercial rocket launches, while Starlink has established itself as a rapidly growing, highly profitable satellite communications platform with few direct competitors.
However, a great business does not always translate into a great investment if the purchase price already reflects years of future success.
Investor enthusiasm surrounding Elon Musk and SpaceX’s long-term potential could certainly continue supporting the stock, even if valuation metrics remain elevated. Momentum and sentiment can keep premium-priced companies trading above what traditional valuation models would suggest.
For investors focused on fundamentals, though, the current share price still appears difficult to justify. While SpaceX’s long-term outlook remains compelling, waiting for a more attractive valuation may offer a better balance between risk and potential return.
