Key Points
After just over a month as a publicly traded company, Space Exploration Technologies (NASDAQ: SPCX) is seeing price targets flood in. The average analyst price target suggests meaningful gains could be ahead for the stock over the next 12 to 18 months.
One prediction, however, stands out from the rest. For his bull case, John Godyn of Citigroup forecasts SpaceX stock could trade at $900 per share. With a $5,000 investment at today’s prices, that could provide quite the windfall, but the caveat is, it’s going to take the company some time to get there, if it does at all.
The bullish outlook
Since June 12, SpaceX has traded within a range of $137 to $226. There are many different price points at which a shareholder could have bought in, but to keep it simple, let’s base our hypothetical case on the July 10 closing price of $145.30.
With a $5,000 investment at $145.30, an investor would receive about 34.4 shares (assuming they’re using one of the many platforms that allow the purchase of fractional shares). If the stock price were to reach $900, that $5,000 investment would grow to a little under $31,000 — a little more than six times the original investment.
The details behind the $900 SpaceX prediction
Typically, analysts’ price targets are set for a 12- to 18-month time frame. The $900 price target from the Citi analyst is more about a bullish case further down the road, as he also has a $200 price target for the 12-month to 18-month window.
According to a note seen by Barron’s, Godyn said, “Starship will establish the most affordable and scalable path to unlocking the economic potential of space.”
Starship, which consists of a spacecraft and a reusable rocket booster, is SpaceX’s largest craft to date. It’s designed to cut the cost of reaching low Earth orbit by up to 90% compared to its Falcon 9 rocket. Eventually, Starship is expected to have the capability to carry up to 100 people on long-duration flights, enable satellite delivery, and support the development of a base on the Moon.
As the cost of putting payloads into space declines, SpaceX’s vision of a constellation of satellites serving as artificial intelligence (AI) data centers can also begin to take greater shape. In February, Elon Musk’s company filed an application with the Federal Communications Commission for permission to launch a network of up to 1 million solar-powered data center satellites, although it will be some time before SpaceX reaches the scale to deploy such a vast network. But the company says it could begin launching the first wave of those satellites as early as 2028.
The average analyst price target
The average analyst price target, according to data tracked by Barron’s, differs significantly from Citi’s longer-term $900 bull case. When 15 new analyst ratings came in during the week of July 6, their average price target was $250, and the average 12- to 18-month price target of all analysts at the time was $240.
At $900 per share, SpaceX would have an expected market cap of $12 trillion. That’s a steep climb from its current $1.9 trillion market cap.
Analyst price targets are a sentiment gauge, not a guarantee
Given SpaceX’s diverse operations that span rockets, broadband satellites, terrestrial data centers, AI, and social media, as well as its ambitious plans for data centers in space, making a prediction about what the stock will be worth down the road is challenging.
It’s a unique business, and there are few peers to compare it to, so while price targets may be helpful for gauging sentiment, they should be taken with a large grain of salt. That said, the analysts’ views do point to the idea that those who hold this stock for the long haul will have the best opportunities to book the biggest potential gains.
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Citigroup is an advertising partner of Motley Fool Money. Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
