Key Points
Space Exploration Technologies (NASDAQ: SPCX) hasn’t been trading publicly for a full month yet, but it has already been through plenty of price swings. Since its initial public offering (IPO) on June 12, the stock price has traded as low as $147.11 and as high as $225.64.
As of the close of trading Tuesday, it was back down to $149.47.
Early SpaceX returns
On June 12, SpaceX went public at $135 per share, but it opened trading at $150. For nearly all retail investors, that would have been the first price at which they could have picked up shares, and plenty of them attempted to. But many of those investors had difficulty filling their entire orders. On the day, the stock price climbed as high as $176.52, but it closed at $160.95
Given the significant variations in the prices investors paid for their shares on that day, we’ll use the first-day closing price of $160.95 to calculate potential returns.
With online brokers like Robinhood Markets allowing fractional investing, investors no longer need to buy full shares of companies; they can invest in dollar amounts instead. A $1,000 investment in SpaceX at $160.95 per share would give an investor a little more than six shares.
Based on SpaceX’s closing price of $149.47 on Tuesday, July 7, that $1,000 investment would now be worth roughly $926 — a 7.4% decline.
But for investors, what’s more important than where a stock has been is where it’s headed. And some analysts recently offered fresh views on that topic.
Analyst outlooks
Despite the choppy trading early on, the good news for shareholders is that a fresh wave of analyst price targets suggests upside ahead. According to Barron’s, the average 12-month price target among 15 new analyst ratings is roughly $250 per share. That stock price would give SpaceX a market cap of $3.3 trillion.
If that $250 price target is reached from the July 7 closing price of $149.47, that would represent a gain of more than 62%.
However, it’s worth keeping in mind that each price target is merely an analyst’s estimate. Looking at all of them as a group can give investors a sense of the potential range of where a stock could trade in the next year or so, but there are no guarantees that it will reach those prices within that time frame. Also, because of its diverse business units and its speculative space operations and artificial intelligence (AI) infrastructure build-outs, SpaceX is not the easiest company to value.
SpaceX’s long-term story is still playing out
SpaceX believes it has a $28.5 trillion total addressable market, with $26.5 trillion of that potential coming from AI. Part of its path toward capitalizing on that opportunity will involve establishing AI infrastructure and commercializing an orbital constellation of data center satellites.
The company will face plenty of challenges as it attempts to make those things happen, but if SpaceX executes successfully, it could produce gains for long-term shareholders. However, investors will need to give it more time to turn its ambitious visions into reality.
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
