Shares of SpaceX (ticker: SPCX) tumbled more than 10% in early U.S. trading Tuesday after KeyBanc analysts initiated coverage with a neutral rating and declined to set a price target, amplifying investor anxiety about the company's valuation.
KeyBanc's Cautious Start Underscores Valuation Debate
According to a June 22 report from Barron's, KeyBanc issued a "Sector Weight" rating on SpaceX without a target price, saying the company will likely dominate the space launch industry for years but much of its future growth may already be priced in. "SpaceX possesses significant disruptive growth avenues, though we believe this is reflected in current valuation and risk/reward appears balanced," the note said. The firm identified Starlink as a key revenue driver and acknowledged AI-related expansion could support growth.
SPCX traded around $165.63 at writing, extending losses after one of history's most successful public offerings. Morningstar analysts estimated a fair value of $63 per share, arguing the stock trades above fundamental support levels.
Post-IPO Reality Check
SpaceX's June 12 IPO raised over $85 billion after underwriters exercised the greenshoe option, pushing Elon Musk's net worth above $1 trillion and minting new billionaires among early investors and institutional backers. But attention has shifted from the scale of the listing to whether the business can generate enough growth to justify its market cap.
First Bond Sale Adds Pressure
Amid valuation concerns, SpaceX entered debt markets for the first time, issuing senior unsecured notes. Barron's reported the company holds roughly $100.8 billion in cash and will use proceeds mainly to repay bridge financing, with the rest for general corporate purposes. Reports last week suggested SpaceX could explore a bond raise as large as $20 billion, indicating sustained investor demand for Musk's space and AI ventures.
With analysts split between long-term confidence and near-term valuation worries, traders are assessing whether this decline marks a temporary reset after an extraordinary rally or the start of a prolonged adjustment.