New Street Research has initiated coverage of SpaceX (NASDAQ:SPCX) with a 12-month price target of $165 per share, implying potential upside of approximately 22% from the company’s proposed IPO price and valuing the business at around $2.3 trillion following its potential acquisition of Cursor.
Analyst Pierre Ferragu outlined a multi-faceted valuation approach that supports a higher assessment of the company as it prepares for one of the most closely watched stock market debuts in history.
Valuation Built on Three Key Frameworks
Ferragu said the research firm’s analysis was based on three separate valuation methodologies designed to assess both the current business and its long-term growth potential.
The first approach uses a sum-of-the-parts framework, including a discounted cash flow valuation of Starlink and an assessment of how xAI’s value could be enhanced by the proposed Cursor acquisition, its integration with what Ferragu described as a “highly cash-generating telecom business,” and the possibility of gaining direct access to orbital computing capabilities.
Within this framework, third-party launch services were viewed as a relatively minor contributor to overall value.
Focus on Long-Term Growth Potential
The second valuation method examines where SpaceX could stand by 2030 in terms of revenue generation and growth prospects.
Under this scenario, New Street Research applied valuation multiples based on earnings and sales metrics from comparable companies to estimate the company’s future worth.
The analysis reflects expectations that SpaceX’s businesses, particularly Starlink and its artificial intelligence initiatives, could continue expanding at a rapid pace over the coming years.
Broader Space Market Opportunity Considered
The third element of the valuation process serves as a cross-check against the long-term size of the global space economy.
Ferragu’s assessment considers how SpaceX could benefit from the continued expansion of commercial space activities, satellite communications, launch services and emerging space-based computing opportunities.
The combination of these factors contributed to the firm’s bullish outlook on the stock ahead of its public listing.
Investor Interest Builds Ahead of IPO
New Street Research’s coverage launch comes as SpaceX moves closer to its highly anticipated initial public offering, an event that has attracted significant attention from both institutional and retail investors.
The company’s public debut is expected to be one of the largest and most closely scrutinised listings ever undertaken.
Debate Continues Over Potential Tesla Tie-Up
Separately, discussion around a possible future combination of SpaceX and Tesla (NASDAQ:TSLA) continues to attract attention on Wall Street.
Earlier this week, Wolfe Research noted that speculation surrounding a potential merger between the two Elon Musk-led companies has increasingly entered mainstream investor discussions, with some shareholders citing the possibility as a central reason for owning Tesla stock.
However, analysts at Oppenheimer pushed back against that view in a note released on Thursday, stating that they see little strategic rationale for a merger between Tesla and SpaceX.
The differing opinions highlight the growing debate among investors over how Musk’s various ventures may evolve as SpaceX enters the public markets.
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