Morningstar maintained its $62 fair-value estimate, implying about 58% downside, and rates SPCX stock one star.
- SPCX stock jumped 10% Wednesday to $148, trading 10% above its IPO price and 41% above its Aug. 3 low.
- Short interest plunged to 11% from 34% as bearish traders exited positions and SpaceX’s tradable float expanded.
- More than 911 million shares were recently unlocked, with another 319 million potentially coming on Aug. 20.
SpaceX (SPCX) shares are eyeing another winning week after rebounding sharply from their post-earnings slump, but Morningstar warned investors to “divorce” the stock’s volatile trading from the company’s fundamentals and valuation.
SPCX stock jumped nearly 10% on Wednesday to $146.15, leaving it about 8% above its $135 IPO price and 39% above its Aug.3 low. Shares have gained 10% so far this week after rallying 23% last week.
Morningstar Warns On SpaceX Rally
Morningstar Chief U.S. Market Strategist Dave Sekera said SpaceX’s rally may reflect temporary supply-and-demand forces rather than changes in its underlying value. “You really need to divorce what’s going on with the fundamentals of the company and the valuation of the company versus how it’s going to trade in the marketplace,” Sekera said on The Morning Filter podcast.
More than 900 million restricted SpaceX shares recently became available for sale. Sekera said the stock’s near-term direction would depend on how many early holders sell and whether passive funds, active managers and retail investors can absorb the additional supply.
“There’s a lot going on here, a lot of machinations in the short term, which you just really don’t know,” he said. The unlock could have a “huge impact” on short-term trading but is “not meaningful” to SpaceX’s long-term intrinsic value, he added. Morningstar maintained its $62 fair-value estimate after SpaceX’s first earnings report as a public company, implying about 58% downside from current levels. Sekera said the one-star-rated stock trades at more than twice that value.
“If you want to be involved in the company, I think you need to ignore what’s going on with the short-term trading patterns,” he said.
Morningstar Questions Starship Optimism
SpaceX’s second-quarter revenue surged 92% year-over-year to $7.8 billion, led by a 7x growth in its AI business. Starlink and launch revenue increased 67% and 29%, respectively, although elevated research and development spending kept the company in an operating loss. Sekera said investors are pricing in “much more optimistic scenarios” for Starship and greater commercial benefits from orbital data centers than Morningstar considers most probable.
SpaceX reported $18.4 billion in quarterly capital expenditures, which is more than twice its revenue, including $15.8 billion for AI infrastructure. The company nevertheless expects to reach an annualized revenue run rate of at least $100 billion by December.
Short Sellers Retreat As SPCX Rebounds
Short interest in SpaceX fell to about 11% of its publicly traded shares on Wednesday from a peak of 34% last week, CNBC reported, citing S3 Partners, as bearish investors exited positions and the lockup expiration expanded the tradable float.
Covering bearish positions requires investors to repurchase shares and may have added fuel to the rebound. “Shorts that wanted to short are out of bullets,” S3 Partners’ Ihor Dusaniwsky said. “Only so much money you can put into a trade.” More than 911 million shares became eligible for trading last Thursday, exceeding the 639 million shares sold in SpaceX’s IPO. Another 319 million shares could be unlocked on Aug. 20, followed by 700 million in September and a similar amount in October.
How Do Retail Traders Feel About SPCX?
On Stocktwits, retail sentiment for SPCX was ‘extremely bullish’ amid an 88% jump in 24- hour message volumes.
One user said, “The insiders know better than anyone else they are sitting on a gold mine. They are the engineers who are building this, they know. Folks should take notice.”
View this Stocktwits post
Another user said, “$SPCX To be honest I invested in spacex cuz i thought it was going to the moon. But im happy that my loss went from 600 down to 400$ so i’ll take it, hoping it goes back up to 180 so i can sell and make some profit lol.”
View this Stocktwits post
SPCX stock has declined 9% over the past three months.
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