One Wall Street Analyst Sees 50% Upside in SpaceX. Why I'm Still Not Buying

An Oppenheimer analyst set a $250 price target on SpaceX, implying a 50% upside from current levels. The recommendation comes amid growing demand for launch services and satellite internet.

Recommendation Change

Prior to this, Oppenheimer had no official price target on SpaceX. The new $250 target represents the bank's first valuation of the private company.

Analyst's Rationale

The analyst believes SpaceX has a strong competitive edge in the launch market thanks to its reusable Falcon 9 rocket, along with rapid growth of Starlink. The Starship project could also open new frontiers in interplanetary travel.

Context

No other analysts have issued similar recommendations for SpaceX as it is a private company. The stock trades on secondary markets at a significant premium. The company's recent performance has been strong with increasing launch cadence and Starlink subscribers.

What We Conclude

Despite the optimism, the author argues that the price target may not fully reflect risks inherent in the space sector, such as regulatory and technical challenges. Moreover, the lack of liquidity in the private stock makes it a high-risk investment.