Morningstar reiterated Monday that its $780 billion fair value estimate for SpaceX already assumes major breakthroughs, including rapid Starship reusability and commercialized space-based data centers, yet still falls roughly 55% short of the company’s reported $1.75 trillion IPO valuation.

The independent research firm said investors appear to be assigning significant value to future businesses and technological breakthroughs that have yet to prove their commercial viability.

Bull Case Already Assumes Major Breakthroughs

Morningstar said its $63 per-share fair value estimate already incorporates significant upside from some of SpaceX’s most ambitious long-term initiatives.

The firm’s valuation assigns a combined probability of just 7% to Starship achieving rapid reusability and orbital data centers becoming a commercially viable business, assumptions that underpin its most optimistic scenario.

Even with those assumptions embedded in its analysis, Morningstar said SpaceX’s reported IPO valuation leaves limited upside, warning that the economics of space-based computing remain largely unproven.

Last week, Morningstar analyst Nicolas Owens said investors are likely to find a better margin of safety after the IPO than they will on the day of the listing or in the weeks immediately following it.

Why Investors Are Excited About SpaceX

SpaceX has become the dominant player in commercial space launches, carrying satellites, cargo and astronauts for both government and private-sector customers.

The company has widened its lead through reusable rocket technology, which has helped lower launch costs and increase mission frequency.

The company has also benefited from limited access for public-market investors, helping fuel demand ahead of its long-awaited listing.

Earlier this week, investor Ron Baron said SpaceX could ultimately become the most valuable company ever created, forecasting that its valuation could grow from less than $2 trillion at IPO to as much as $30 trillion over time.

However, not everyone is convinced by the valuation. Steve Eisman, famed for his successful bet against the housing market before the 2008 financial crisis, in his podcast Saturday called SpaceX’s valuation “crazy” and said the company’s expansion into AI has made the bull case far riskier.

What Could Justify A Higher Valuation

Morningstar said a more bullish outcome would require SpaceX to execute successfully across multiple businesses while maintaining its leadership in launch services.

The firm noted that Starship could dramatically expand the economics of space transportation if the vehicle achieves the reliability and launch cadence expected by management.

In addition, emerging opportunities such as in-space computing and data infrastructure could create new revenue streams that are not yet reflected in the company’s current financial performance.

Morningstar described SpaceX as a leader in the emerging space economy but argued that investors are paying today for opportunities that remain years away from commercial validation.

SpaceX is expected to go public on June 12, which could become the largest IPO in market history.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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