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Tesla Analyst Values SpaceX At $50B, With Starlink The Biggest Growth Driver

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Tesla Analyst Values SpaceX At $50B, With Starlink The Biggest Growth Driver

Tesla Inc's (NASDAQ: TSLA) sister company, SpaceX, carried its first astronauts into orbit last week, making history for the private space industry.

Achievements such as this have helped CEO Elon Musk attract investments for ambitious projects. SpaceX’s recent $125 million funding round brought the company to a $36 billion valuation, according to CNBC. Morgan Stanley cites a valuation closer to $50 billion.

Starlink Success

The analysts suspect SpaceX’s value lies largely in Starlink, the company’s low-latency broadband internet system.

“We are modeling for $10 billion to $15 billion from 2020-2025 for Starlink, with the potential for more from ground terminals, 30,000 additional satellites and replacement of satellites, and expenditures associated with Starship/hypersonic point-to-point transport and Mars/deep space exploration,” analysts Armintas Sinkevicius, Adam Jonas, Simon Flannery and Matthew Sharpe wrote in a note.

In a best-case scenario, with the broadband internet taking off, SpaceX could achieve a $120 billion valuation. If the project fails entirely and SpaceX remains a satellite launcher, valuation could drop to $5 billion.

Starship Support

Morgan Stanley also sees potential in SpaceX’s Starship, “which can accelerate the deployment of the Starlink network, and unlock opportunities around hypersonic point-to-point transportation and deep space exploration,” the analysts wrote.

The company’s first Starship technology to pass the cryogenic tanking test failed to withstand a static fire test last week, but SpaceX has already begun construction on a new prototype. President and COO Gwynne Shotwell has forecasted successful Starship flights by 2026.

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Latest Ratings for TSLA

DateFirmActionFromTo
Jul 2020Morgan StanleyMaintainsUnderweight
Jul 2020JP MorganMaintainsUnderweight
Jul 2020WedbushMaintainsNeutral

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