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A forecast of the fair market value of SpaceX's businesses

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Re: A forecast of the fair market value of SpaceX's businesses

#41

Post by lotsofpulp »

Noaidi wrote: post #27
ddp26 wrote: post #5

Earlier quoted context omitted.

Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair? That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink. Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the anal…

I mean, shouldn’t the price to earnings ratio be 1? Anything higher or lower is just speculating or other words, gambling.

At the extremes, taking the next step is speculating because you might trip and fall and hit your head.

Re: A forecast of the fair market value of SpaceX's businesses

#43

Post by kibwen »

genidoi wrote: post #16

> Starship at $170B is pure option value on technology still in advanced testing. The argument that Starship is somehow an experimental/unproven technology that might fail to materialise was absurd but plausible sounding before flight 1, there were many new technologies simultaneously being deployed to a single launch system in one go. But after 3 tower catches of the booster demonstrating centimetres of guided preci…

The question is not even whether or not Starship works. Starship is, in theory, designed with the idea of getting many, many payloads to Mars. However, getting payloads to Mars is not currently something that anyone is paying for; even NASA isn't going to focus on Mars for at least another decade (likely more). And in the meantime, it's not like we don't have rockets capable of getting payloads to Mars (the Saturn V was fully capable of doing so in the 60s). Likewise in the meantime, the Artemis plans that look to require a dozen+ launches for a single moonshot aren't painting Starship in a favorable light.

So what is the near-to-medium-term economic prospect of Starship? That's the question. You can't just say "bigger rocket make more money", because there exists a useful upper to the size of payloads that companies actually want to ship to LEO in practice. To use an analogy, we have jumbo jets, but most flights are not on jumbo jets.

Re: A forecast of the fair market value of SpaceX's businesses

#44

Post by lotsofpulp »

croes wrote: post #28
jgbuddy wrote: post #19

Were people overpaying 30% for tesla in 2010?

Yes, and they still do

Tesla's highest market cap in 2010 was $3.3B. Tesla has more net income, sometimes multiples more, per year, from 2021 to 2025.

For comparison, it is routine to see sale prices of 3x to 5x revenue for many, many kinds of everyday businesses that have much less potential than Tesla.

There are very, very few businesses whose shares one could have purchased in 2010 that performed better over the subsequent 15 years. That is about as objective as one can get about determining whether or not something was under or over valued (in 2010).

Re: A forecast of the fair market value of SpaceX's businesses

#45

Post by cheschire »

Noaidi wrote: post #27
ddp26 wrote: post #5

Earlier quoted context omitted.

Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair? That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink. Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the anal…

I mean, shouldn’t the price to earnings ratio be 1? Anything higher or lower is just speculating or other words, gambling.

I remember in the 00’s when people would complain about how ridiculous a 30 PE was for tech stocks, and how no other stock was at that ridiculous price point except tech. Guess that starship has sailed.

Re: A forecast of the fair market value of SpaceX's businesses

#46

Post by AlexandrB »

genidoi wrote: post #16

> Starship at $170B is pure option value on technology still in advanced testing. The argument that Starship is somehow an experimental/unproven technology that might fail to materialise was absurd but plausible sounding before flight 1, there were many new technologies simultaneously being deployed to a single launch system in one go. But after 3 tower catches of the booster demonstrating centimetres of guided preci…

The tower catches are great, but the payload rating has been reduced several times now[1] and with it the economic argument for how Starship will make launching much cheaper than today as well as suitability for lunar/Mars launches. For Starship to be revolutionary enough for this kind of valuation it has to not just work, but outperform current solutions.

SpaceX has basically admitted as much by promising Starship 2 & 3 with larger payloads (that Starship 1 was already supposed to deliver).

[1] https://www.americaspace.com/2024/04/20/starship-faces-perfo...

Re: A forecast of the fair market value of SpaceX's businesses

#47

Post by jmye »

saadn92 wrote: post #22

The xAI piece is the one that stands out to me. $258B for a lab that's burning $1.46B/quarter against $430M revenue, valued almost entirely on a merger anchor from four months ago.

Even if you think those are standard numbers and you're banking on growth, or whatever, I don't see any way anyone rational (or even a semi-rational AI bull) could convince themselves xAI isn't an absolute garbage company.

Re: A forecast of the fair market value of SpaceX's businesses

#48

Post by jmye »

ddp26 wrote: post #5
sharemywin wrote: post #2

Not bad for about $12-$16B in total actual revenue. net income probably: $1.5B – $3B P/E:500-1000 Of course people will trip overthemselves to buy it up.

Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair? That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink. Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the anal…

> But it's not like the P/E should be 30

... Why not? Aside from memes, I mean.

Re: A forecast of the fair market value of SpaceX's businesses

#49

Post by fastball »

Noaidi wrote: post #27
ddp26 wrote: post #5

Earlier quoted context omitted.

Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair? That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink. Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the anal…

I mean, shouldn’t the price to earnings ratio be 1? Anything higher or lower is just speculating or other words, gambling.

Of course not. If the P/E was 1, every single public company would be immediately gobbled up by Private Equity firms, who would make their money back after a few years of operation and the rest would be pure profit.
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