Although it is undeniably highly anticipated, the Tuesday, August 4 SpaceX (NASDAQ: SPCX) earnings report remains something of a black box in terms of what investors can expect.
To begin with, Elon Musk’s newer public company has, as multiple analysts noted, been undergoing a business transformation during the second quarter (Q2) in a series of moves arguably bringing it closer to the artificial intelligence (AI)-heavy vision outlined in the S–1.
Specifically, compute agreements with Anthropic and Google’s parent company, Alphabet (NASDAQ: GOOGL), are poised to bring in roughly $2 billion per month in additional revenue, though the overall Q2 impact will be more limited.
Still, analysts are expecting strong growth in sales from slightly under $5 billion in Q1 up to nearly $7 billion for the period ended June 30. They do, however, also anticipate SpaceX remaining an unprofitable company for the time being.
Is SpaceX stock a good investment ahead of Q2 earnings report?
Overall, the fact that SpaceX is set to report its first-ever quarterly earnings report after its initial public offering (IPO), paired with SPCX shares’ performance in the stock market, raises the question of whether it is time to buy the equity.
Notably, the 33.80% drop to $106.20 in the last 30 days and the 21.33% drop from the $135 IPO price both hint that an upward correction might be brewing.
Given the setup, the imminent earnings appear like the final catalyst to drive SPCX shares upward after more than a month of decline, though other factors still paint it as a dubious investment.
Only a significantly larger-than-expected earnings beat can begin to diminish the gaping divide between company financials and its valuation – a factor that represents a major long-term risk for shareholders.
In the more short-term, the Q2 filing will also usher in the first batch of insider SpaceX stock unlocks, meaning that SPCX will be facing significant selling pressure almost immediately after beginning its next rally.
This, the equity of Elon Musk’s newer public company is likely to remain, at best, a ‘Hold’ for the foreseeable future, even if the Tuesday filing provides sufficient tailwinds for a rally.
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