Short-seller Jim Chanos criticized SpaceX's target valuation of $1.75 trillion as built on 'hopes and dreams' at an iConnections conference in New York on Wednesday, one day before the company's scheduled Nasdaq debut on Thursday. Chanos stated SpaceX is being valued at 90 times its sales at the $135 per share offer price, compared to Tesla Inc.'s sales multiple of 14. The comments come amid contrasting analyst views, with Oppenheimer initiating coverage with an Outperform rating and $195 price target while Morningstar values SpaceX at $63 per share, a 53% discount to the offer price.
Chanos Highlights SpaceX's 90x Sales Multiple
According to a Reuters report, Chanos said at the conference that he believes SpaceX is not worth $1.75 trillion based on reasonable assumptions over the next five years. At its target valuation of $1.75 trillion and with shares offered at $135 apiece, Chanos said SpaceX is being valued at 90 times its sales, while Tesla Inc. has a multiple of 14.
'We really can build whatever stories we want --- colonies on Mars, factory tunnels, data centers in space --- to justify the valuation. In bull markets, you put a premium on promises and in bear markets, you put a discount on reality,' Chanos added.
SpaceX is aiming to raise $75 billion through the offering, which has been reported as oversubscribed. The company is expected to price the deal on Thursday.
Morningstar and Kass Value SpaceX at Significant Discounts
Chanos is not the only analyst expressing skepticism about SpaceX's valuation. Morningstar analysts echoed similar sentiments in a note this week, valuing the SpaceX IPO at $63 per share, which represents a discount of about 53% to the offer price.
Seabreeze Partners Management President Doug Kass said he values SpaceX at nearly a 50% discount to the offer price, at approximately $70 per share.
Oppenheimer Initiates Outperform Rating with $195 Target
According to TheFly, Oppenheimer analysts initiated coverage of SpaceX with an Outperform rating and $195 price target. This implies an upside potential of 44% relative to SpaceX's offer price of $135.
While regulatory and execution risks remain, Oppenheimer believes the company's infrastructure is structurally advantaged and could address a $10 trillion market by 2035. The firm also expects strong early demand for the shares, driven by retail interest and rapid index inclusion.
Oppenheimer added that SpaceX aims to combine communications and AI through its space-based infrastructure, giving it unique scale and cost advantages. The firm views SpaceX as the only vertically integrated AI company with the necessary capital, data, models, hardware, and engineering talent.
Goldman Sachs and Morgan Stanley Project Revenue Growth to 2040
Goldman Sachs and Morgan Stanley projected strong revenue growth for SpaceX, forecasting a sharp increase in the company's topline over the coming years.
Morgan Stanley projects SpaceX's revenue will soar from $18.7 billion in 2025 to $3.4 trillion by 2040, representing an increase of more than 180-fold.
Goldman Sachs forecasts that SpaceX will generate $474 billion in revenue by 2030, including $322 billion from AI-related businesses.
The Procure Space ETF is up 113% during this period, while the Tema Space Innovators ETF is up 30%.
FAQ
What valuation is SpaceX targeting in its IPO?
SpaceX is targeting a valuation of $1.75 trillion with shares offered at $135 apiece, aiming to raise $75 billion through the offering.
Why does Jim Chanos criticize SpaceX's valuation?
Chanos stated at an iConnections conference on Wednesday that SpaceX is being valued at 90 times its sales, compared to Tesla's sales multiple of 14, and believes the valuation is built on 'hopes and dreams' rather than reasonable assumptions over the next five years.
What price target did Oppenheimer set for SpaceX?
Oppenheimer analysts initiated coverage of SpaceX with an Outperform rating and $195 price target, implying an upside potential of 44% relative to the $135 offer price, citing the company's potential to address a $10 trillion market by 2035.
