CFRA hands SpaceX a Sell rating with $115 target after IPO

CFRA initiated coverage of SpaceX with a Sell rating and $115 price target, implying a 30% downside from the IPO price.

"SpaceX's valuation already prices in years of flawless execution across its satellite internet and AI businesses," CFRA analysts wrote in a note dated June 13. The firm cited the company's $4.9 billion net loss in 2025 against a $1.77 trillion market capitalization as a key concern.

The $115 target represents a 30% discount to SpaceX's $165.20 closing price on its first trading day and a 15% discount to the $135 IPO price. SpaceX raised $75 billion in the June 12 offering, the largest IPO in history, surpassing Saudi Aramco's $29.4 billion record. The company posted $18.7 billion in 2025 revenue, led by its Starlink connectivity business which generated $11.4 billion from 10.3 million subscribers.

The Sell rating puts CFRA in a contrarian position against the broader analyst community. Oppenheimer initiated coverage with an Outperform rating ahead of the IPO, and the stock surged 22% on its debut. CFRA's bearish call tests whether SpaceX's post-IPO momentum can withstand skepticism from a major independent research firm.

SpaceX trades at roughly 95 times 2025 revenue, a multiple CFRA described as unsustainable for a company that has yet to post an annual profit. The firm noted that while Starlink's subscriber growth and the February acquisition of xAI expand SpaceX's addressable market, the combined entity's losses are widening as it invests across both space and artificial intelligence.

The contrarian call arrives as index funds prepare to absorb SpaceX shares. Nasdaq and Russell indexes amended inclusion rules ahead of the IPO, allowing the stock to qualify for benchmark indices within weeks rather than months, a move that could force passive funds to buy shares at elevated prices.

CFRA's $115 target implies a market value of roughly $1.5 trillion, still among the highest valuations in the public markets but well below the $1.77 trillion assigned at the IPO. The firm said it would reconsider its rating if Starlink's profitability improves faster than expected or if xAI begins generating meaningful revenue.

The Sell rating signals that at least one major research firm sees SpaceX's post-IPO valuation as disconnected from its financial fundamentals. Investors will watch for additional analyst initiations in the coming weeks and the company's first quarterly earnings report as a public entity, expected in August.

This article is for informational purposes only and does not constitute investment advice.