The much-anticipated initial public offering (IPO) of SpaceX is set to open this week, marking what could be the largest IPO in history. With a proposed price of $135 per share, the company aims to raise a staggering $75 billion, valuing it at around $1.77 trillion. While the company is widely seen as a key player for the future and an appealing choice for long-term portfolios, the main debate is whether the stock is worth its expected price.
Valuation is always subjective and heavily reliant on assumptions. At one hundred times sales, the $135 price tag looks premium. Sales drive earnings, and earnings drive stock prices over time. For example, independent research firm Morningstar pegs the fair value closer to $70 per share (implying an enterprise value of $780 billion), suggesting the IPO price leaves little margin of safety.
Given this debate, how should everyday investors approach the IPO? To answer that, let us break it down simply into three key factors I often rely on when evaluating any stock,
Valuing SpaceX
First, consider the fundamentals: margins, earnings, and profitability. SpaceX reported approximately $18.7 billion in revenue for 2025, with Starlink (its satellite internet business) as the clear profit engine. According to SpaceX’s financial data, both the launch services and AI/compute divisions continue to see significant investment and are currently operating at a loss. In 2025, SpaceX reported a net loss of $4.94 billion, while achieving gross profit of $9.22 billion. That is impressive for a company operating in a capital-intensive space tech sector. Future earnings will play a crucial role in shaping valuation metrics such as price-to-earnings, return on equity, and earnings multiples, but right now, the company shows operating losses due to heavy R&D and capex; Starlink’s scaling and new compute streams point to improving profitability. Thus, investors buying at $135 are paying a high multiple today, betting that earnings will catch up rapidly.
