Key Takeaways
- Shares of SpaceX declined 0.5% to $114.60 on Monday despite a successful Starship test flight over the weekend
- The stock has plummeted approximately 38% across three consecutive weeks, trading beneath its $135 IPO level
- HSBC launched coverage with a neutral Hold recommendation and $115 target, factoring in a 2x “innovation premium” while still valuing below market price
- Analysts project the company will consume approximately $106 billion in cash before achieving positive free cash flow by 2030
- Critical August milestones approach: first quarterly report on August 4 and significant lock-up release on August 6 that may expand tradable shares dramatically
Shares of SpaceX (SPCX) decreased 0.5% to $114.60 during Monday’s trading session, despite the aerospace company executing an impressive 13th Starship test mission on Friday night. The decline came as broader markets rallied ā S&P 500 futures advanced 0.9% while Dow futures jumped 1.1% ā highlighting the stock’s underperformance.
Space Exploration Technologies Corp., SPCX
The aerospace stock has experienced three consecutive weeks of losses, shedding approximately 38% during this period. Trading below its June IPO price of $135, SPCX now sits more than 40% off its all-time closing peak of $201.80.
Friday’s Starship mission accomplished most mission objectives. The spacecraft’s upper section successfully deployed 20 Starlink V3 satellites, demonstrated in-space engine restart capability, and completed a controlled ocean landing in the Indian Ocean. While the booster failed to achieve its soft landing goal, KeyBanc analyst Michael Leshock characterized the mission as “near perfection” and a “meaningful success.”
The company anticipates launching Flight 14 within weeks. CEO Elon Musk announced that SpaceX intends to attempt catching the upper stage using the launch tower’s mechanical arms ā a maneuver previously accomplished only with the booster.
Wall Street Questions Current Pricing
HSBC became the inaugural major financial institution to publish SPCX coverage on July 25, assigning a Hold recommendation with a $115 target ā trailing the stock’s $118.24 price at the time. The firm’s methodology involved separate valuations for each business unit, supplemented by a 2x “innovation premium” recognizing Musk’s entrepreneurial history. Despite this favorable adjustment, analysts concluded the shares were overvalued.
HSBC’s baseline forecast anticipates revenue expanding to $38.2 billion in 2026, representing more than double the projected $18.7 billion for 2025. However, the firm expects continued GAAP losses through 2027 and negative free cash flow persisting until approximately 2030, necessitating cumulative cash consumption of roughly $106 billion.
The bank’s optimistic scenario values SPCX at $293 per share ā contingent on successful Starship commercialization, accelerated Starlink customer acquisition, and earlier-than-expected AI revenue materialization.
Artificial Intelligence Division Drives Losses
SpaceX’s first quarter 2026 financial results revealed $4.69 billion in revenue alongside a $1.94 billion operating deficit. Starlink dominated performance with $3.26 billion in sales and $1.19 billion in operating profit. The AI division generated $818 million in revenue while recording a substantial $2.47 billion operating loss.
First quarter capital expenditures reached $10.1 billion, with $7.7 billion allocated to AI infrastructure ā the business segment HSBC considers most challenging given intense competition from Amazon, Microsoft, and Google.
Starlink has demonstrated robust subscriber expansion, reaching 10.3 million customers by quarter-end, up from 5 million twelve months prior. However, average monthly revenue per user contracted to $66 from $86 as the company penetrated lower-priced international markets.
The company will release its inaugural public quarterly earnings report after market close on August 4. Just two days following, on August 6, the initial lock-up period expires, potentially releasing 911.5 million shares for trading ā expanding the public float from approximately 4.9% to roughly 12%.
Short sellers have accumulated approximately $15.5 billion in unrealized profits since the IPO, with short positions representing nearly 31% of available shares for trading.
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