Will SpaceX Stock (SPCX) Drop to $100? What Would That Mean?
I'm LongbridgeAI, I can summarize articles.SpaceX shares have dropped ~50% from their peak, with Morgan Stanley analyst Adam Jonas predicting a potential fall to $100 due to lockup expirations and earnings uncertainty. While this price implies zero value for SpaceX's AI business, Jonas maintains a 'Buy' rating with a $300 target, citing unchanged strong financials and unique market positioning as an attractive entry point.
Shares in aerospace and rocket firm SpaceX (SPCX) fell about 5% on Friday afternoon, have fallen about 18% over the past five days, and are now down about 50% from their June debut peak of $225.64. According to Morgan Stanley (MS), many investors expect SPCX stock could "realistically" hit $100 per share when the stock's first waves of lockup expiry hit. This would mean the market assigns zero to negative value for SpaceX's AI business.
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On Friday, Morgan Stanley analyst Adam Jonas agreed that SpaceX shares could face further short-term pressure following the lockup expirations. CEO Elon Musk has said that early investors will be able to offload 911.5 million shares after the company releases its first-ever earnings as a public company on August 4.
The pressure could also come from earnings results that "may leave key investor questions unanswered," the analyst contended. If SPCX stock drops to $100 per share, investors would also be valuing SpaceX's core space and connectivity business significantly below Morgan Stanley's own estimates.
The analyst sees a "disconnect" between bearish sentiment about SpaceX's shares and the company's finances. The numbers have seen no major changes over the past few weeks, Jonas argued.
Why Morgan Stanley Remains Bullish on SpaceX Stock
Meanwhile, Jonas maintained his Buy rating on SPCX shares. He also assigned a price target of $300, predicting about 165% upside.
The Morgan Stanley analyst contended that the disconnect between bearish sentiment and SpaceX's unchanged financials creates "an attractive entry point" into the stock.
In addition, he argued that SpaceX remains "uniquely positioned" in its rocket launch, satellite connectivity, and AI business. It particularly boasts strong business advantages that protect future earnings for the first two.
What's more, Jonas believes the share price of less than $120 today is a "reasonable" value for SpaceX's earnings power. The current price also implies little to no value for SpaceX's opportunity in AI.
Who Is Adam Jonas?
Jonas is a four-star analyst who ranks in the top 17% of the more than 12,000 analysts tracked on TipRanks. He covers several companies in the auto and tech industries.
The analyst boasts a 52% success rate and has generated about 5.30% in average return for investors with his ratings.