It is no secret that investor sentiment can shift quickly on Wall Street, and SpaceX (NASDAQ:SPCX) currently provides a good example. After delivering a record-breaking IPO last month, the upcoming August 6 lock-up expiry, an aborted Starship test and concerns about the stock’s demanding valuation, have all contributed to the change in mood.

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With the stock now sitting 41% below last month’s highs, the question is whether the sell-off has created an opportunity to buy in. Not according to an investor who goes by the name of Esxeleryn Analytics.

Esxeleryn argues that SpaceX is attempting to execute on several highly ambitious, capital-intensive and largely unproven initiatives at the same time. That leaves little room for execution errors. The company’s forward EV/EBITDA multiple is approximately 93.6x, while its forward EV/Sales multiple is around 40.7x.

The risks could become particularly acute if the AI infrastructure spending boom loses momentum, as the Bank for International Settlements (BIS) has warned could happen. Further delays at Terafab, the company’s planned semiconductor fabrication plant, could also create problems, particularly if the project experiences setbacks similar to those encountered by TSMC with its Arizona fabs.

In that scenario, SpaceX could find itself facing a “liquidity crisis.” The company’s significant capital expenditure requirements mean that cash burn could remain substantial, potentially forcing it to return to the capital markets regularly to fund its expansion.

That funding could become progressively more expensive. The bond market is already demanding elevated yields, while the number of shares available to trade could increase significantly as lock-up restrictions expire. Without the benefit of S&P 500 inclusion and the associated passive fund demand, SpaceX may have to contend with a rapidly rising cost of capital.

Esxeleryn also believes that the current public float does not accurately reflect the eventual supply of shares available to investors. As additional shares become available following lock-up expirations, the resulting increase in supply could trigger a further valuation reset.

The investor believes this could lead Wall Street to re-rate the stock materially lower, potentially forcing the stock’s valuation closer to the multiples typically associated with more mature aerospace and telecom hardware businesses. Retail investors and late-stage institutional buyers could be particularly vulnerable, having potentially bought shares at elevated prices while providing an exit opportunity for pre-IPO venture investors.

So, what is the best course of action?

“It is better to wait and observe SPCX stock’s premium to go away,” Esxeleryn said. “This price free fall may provide smart bulls with a de-risked entry point to capitalize on SpaceX’s business model shift from a hardware launch provider into a high-margin vertically integrated AI Neocloud infrastructure leader. Selling now is too late and should be avoided against TAM, the Terafab and Cursor integrations scale, and progressive business model tilt.”

Bottom line, Esxeleryn rates SPCX stock a Hold (i.e., Neutral). (To watch Esxeleryn Analytics’ track record, click here)

Overall, the Street is far more bullish. While 5 analysts also stay on the sidelines, with an additional 23 Buys and 1 Sell, the stock claims a Strong Buy consensus rating. Meanwhile, the $243.81 average price target offers 12-month upside of 106%. (See SPCX stock forecast)