SpaceX (NASDAQ: SPCX) received a bullish endorsement from Arete on Thursday, June 18, which initiated coverage of the newly public aerospace company with a ‘Buy’ rating and a Street-high SpaceX stock price target of $401.
Arete analyst Andrew Beale said SpaceX’s next-generation Starlink V3 satellites could unlock a ‘sizeable’ opportunity in suburban broadband, expanding the company’s addressable market beyond its current customer base.
In his research note, Beale described SpaceX as ‘breaking hard engineering challenges into stepwise tasks’ while simultaneously developing hardware and software capabilities across space transportation, connectivity, and artificial intelligence (AI).
‘SpaceX is the ultimate growth stock’
The $401 SpaceX price target reflects Arete’s view of the massive long-term opportunities, particularly as the company scales its satellite internet business and continues investing in innovative technologies.
Gabelli Funds expressed a similar view on Elon Musk’s firm, as portfolio manager John Belton has called SpaceX ‘the ultimate growth stock’ with strong growth potential.
“SpaceX is the ultimate growth stock. I think this is a company with significant growth potential ahead of it. It’s definitely going to be a long-term story, and I think it will take time for the stock to find its footing in the public markets. But there are a lot of exciting opportunities ahead,” Belton told Finbold.
Belton further noted that Starlink alone generated approximately $7.5 billion in EBITDA last year while posting around 50% revenue growth and EBIT margins exceeding 40%. Accordingly, he argued that the satellite internet division alone could support a substantial valuation given its rapid growth and profitability.
A $500 SpaceX stock price target?
Even more bullish than Wall Street, Australia’s Aitken Mount Capital Partners recently projected that SpaceX shares could climb to $500, which implies a gain of around 270% from the stock’s IPO price of $135.
According to the firm’s Angus Aitken, some of the key growth catalysts include a tight equity float, expectations that Elon Musk and other key insiders will hold onto their shares, and the belief that SpaceX will continue delivering robust revenue and earnings growth alongside ongoing technological breakthroughs.
Aitken was not the only one to focus on insider activity. For example, Jay Woods, Chief Market Strategist at Freedom Capital Markets, noted that the first earnings report scheduled for August 11 will be important as insider activity will be allowed to pick up the pace, especially if share prices can rally 30% by that time and reach $175.5.
“Key dates to watch include its first earnings release scheduled for August 11. 20% of insiders will be allowed to sell that day. If shares trade 30% above the IPO price for a period of 5–10 consecutive days, then another 10% can be sold by insiders as well. That magic number is $175.5 (30% based on its $135 pricing),” Woods further wrote to Finbold.
Wall Street’s SpaceX stock price prediction
Less than a week after going public, SpaceX boasts four Wall Street ratings with the average price target at $235.25, per the data Finbold retrieved from TipRanks on June 18.
Out of the four ratings, three have been ‘Buys’ and one a ‘Sell,’ meaning SpaceX is currently considered a ‘Moderate Buy.’
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