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Is a Continued Rebound in SpaceX Stock Imminent After Musk's Lofty Revenue Forecast?

Key Takeaways

  • Elon Musk's $500 billion annualized revenue forecast for FY27 has fueled a rebound in SpaceX stock.
  • SpaceX's FY27 EPS estimates have surged 132% over the last 30 days, signaling confidence in its outlook.
  • SPCX's valuation could become much more attractive if Musk's ambitious revenue projections materialize.

Shares of Space Exploration Technologies (SPCX - Free Report) ) are rebounding after a broader tech selloff, fueled by CEO Elon Musk's exceptionally bullish revenue outlook.

After surging nearly 9% last Friday, SPCX has gained another 5% in Monday's trading session, although shares remain well below their 52-week high of $225.

As SpaceX expands its artificial intelligence infrastructure and satellite connectivity businesses, investors are certainly wondering whether the recovery has room to run.

 

Musk's Ambitious $500 Billion Revenue Forecast

At Friday's Baron Investment Conference, Musk projected that SpaceX could achieve an annualized revenue run rate exceeding $100 billion by December 2026 and $500 billion by December 2027.

Musk even suggested that $1 trillion in annualized revenue was not entirely out of the question, although he emphasized that these were personal expectations rather than formal guidance.

Much of this optimism centers on SpaceX's rapidly expanding AI computing business, which helped third-quarter revenue surge 161% year over year to $14.6 billion.

Another potential catalyst is SpaceX's push into the wireless market through Starlink Mobile. The company recently announced a multiyear agreement with Qualcomm (QCOM - Free Report) ) to build terrestrial 5G infrastructure, positioning it to compete more directly with major wireless carriers. Musk has also entertained the possibility of acquiring an established telecom operator.

 

SpaceX's Earnings Outlook & Positive EPS Revisions

SpaceX's improving earnings outlook reinforces the bullish sentiment. Based on the accompanying Zacks Consensus Estimate trend, fiscal 2027 EPS projections have surged from $1.77 to $4.10 over the last 30 days, an impressive 132% upward revision.

Meanwhile, FY26 EPS estimates have more than doubled from $0.09 to $0.19, while first-quarter 2027 estimates have climbed from $0.44 to $0.68 per share (Next Qtr below). Most impressive, of course, is that the jump from EPS of $0.19 this year to $4.10 in FY27 would reflect a +2,000% increase.

These revisions reflect growing confidence in SpaceX's earnings potential as AI infrastructure investments and Starlink expansion accelerate. That said, significant capital expenditures remain a concern, with SpaceX projecting Q4 spending at $35-$40 billion.

Zacks Investment Research
Image Source: Zacks Investment Research

 

SPCX's Valuation Could Become Much More Attractive

Although SPCX's trailing price-to-sales (P/S) multiple remains elevated at roughly 52X, this metric may be particularly useful for evaluating the company as it transitions toward sustained profitability.

At a market capitalization of around $1.9 trillion, SpaceX would trade at just 3.8X annualized sales if Musk's $500 billion revenue run-rate projection materializes. It's noteworthy that this would offer slight discounts to its Zacks Wireless National Industry average and the benchmark S&P 500.

Importantly, this hypothetical multiple uses December 2027's projected annualized revenue rather than actual full-year sales. Still, it illustrates how rapidly expanding revenue could make SpaceX's seemingly lofty valuation more reasonable, provided the company delivers on Musk's aggressive expectations.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Bottom Line: Is The Rebound in SPCX Just Beginning?

For now, SpaceX stock lands a Zacks Rank #3 (Hold), suggesting investors may want to remain patient following its recent rebound.

However, Musk's extraordinary revenue outlook, combined with sharply rising earnings estimates, provides a compelling bullish catalyst. Should positive earnings estimate revisions persist, a buy rating could be on the way for SPCX, potentially supporting a more sustained recovery.

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