SpaceX falls 3.8% as investors weigh politics, AI spending and valuation

Shares fall in active trading

MarketBeat reports that SpaceX stock declined 3.8% during Wednesday trading. The shares touched an intraday low of $133.14 and were last seen at $135.92, compared with the prior close of $141.31. The outlet says about 134.4 million shares changed hands by mid-day, which was 31% above the average session volume of 102.9 million shares.

What MarketBeat says is behind the move

The article says investors are uneasy that political shifts could lead to stricter oversight. According to MarketBeat, that concern could slow construction of data centers and make Elon Musk’s AI expansion more difficult. The report also says a possible SpaceX-Tesla merger could face more scrutiny and take longer to complete.

MarketBeat further says sentiment has been pressured by questions about whether large investments in AI computing will generate acceptable returns in the near term. The article adds that SpaceX’s high valuation has also weighed on investor views.

Recent company developments cited by the report

Despite the share-price decline, MarketBeat highlights several recent developments it describes as positive. The company selected Qualcomm to provide 5G infrastructure for a planned U.S. Starlink Mobile network, which the report says supports SpaceX’s move into cellular service.

The article also says SpaceX’s latest quarterly results showed 161% year-over-year revenue growth and a return to quarterly profitability. MarketBeat attributes those results to Starlink and rapid growth in the company’s AI business.

Analyst views and valuation metrics

MarketBeat says several analysts recently updated their views on the stock. Pivotal Research raised its target from $230 to $260 and kept a buy rating on October 21. Yorkville Ives started coverage on October 6 with an outperform rating and a $225 target. Stifel Nicolaus began coverage on July 7 with a buy rating and a $190 target. TD Cowen raised its target from $200 to $224 and kept a buy rating on October 21. JPMorgan Chase & Co. lifted its target from $240 to $500 and assigned an overweight rating on October 21.

The report says four analysts rate the stock Strong Buy, 30 rate it Buy, nine rate it Hold, and three rate it Sell. Based on MarketBeat data, the consensus rating is Moderate Buy, with an average target price of $244.97.

Financial results, insider activity and holders

MarketBeat says SpaceX’s 50-day simple moving average is $149.68. It also lists a quick ratio of 3.00, a current ratio of 3.08, a debt-to-equity ratio of 0.20, a market capitalization of $1.84 trillion, and a price-to-earnings ratio of 522.42.

The article says SpaceX reported quarterly earnings on October 20, with earnings per share of $0.35, above the consensus estimate of $0.10. The company reported a negative net margin of 8.61% and a negative return on equity of 3.24%. Revenue for the quarter was $14.57 billion, compared with a loss of $0.36 per share in the same quarter a year earlier. MarketBeat says revenue rose 161.4% from the prior-year quarter, and analysts expect full-year EPS of 0.19.

The report also says COO Gwynne Shotwell sold 342,170 shares on September 22 at an average price of $153.57, for total proceeds of $52,547,046.90. After the sale, she directly owned 2,472,035 shares valued at about $379,630,414.95, which MarketBeat says was a 12.16% decrease in her position. The filing was disclosed to the SEC and executed under a pre-arranged Rule 10b5-1 plan.

MarketBeat adds that several large investors recently reported new positions, including SC US Ttgp LTD., Darsana Capital Partners LP, K5 Global Advisor LLC, Mirae Asset Global Investments Co. Ltd., and Thrive Capital Management LLC, with the reported second-quarter and third-quarter position values listed in the story.

Company background

According to MarketBeat, Space Exploration Technologies Corp., known as SpaceX, is a privately held aerospace company founded in 2002 by Elon Musk. The company builds and operates launch vehicles and spacecraft intended to lower the cost of reaching space and to support commercial, government and scientific missions. The report says its main offerings include Falcon 9 and Falcon Heavy rockets, the Dragon spacecraft and the Starlink satellite communications network.