Prediction: This Will Be SpaceX’s Stock Price by the End of 2027 | The Motley Fool

Space Exploration Technologies (SPCX +1.23%) has had an eventful first four months on the stock market. But the company hasn’t made much money for investors who have held on since its debut. As of writing, SpaceX’s shares are trading at $134 each, below the company’s IPO price of $135. Still, SpaceX boasts attractive opportunities. How will the company perform over the next year? Let’s try to determine what its share price might be by the end of 2027.

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Revenue and profit drivers

SpaceX’s financial results have been strong this year. In the third quarter, the company’s revenue grew by 161% year over year to $14.6 billion. It also posted a net income of $4.4 billion — or $0.35 per diluted share — substantially better than the prior-year quarter’s net loss of $1.1 billion (or $0.36 per share).

SpaceX’s annual revenue run rate is now at $58.4 billion. Analysts expect the company’s total revenue for the current fiscal year to be $48.93 billion (according to Yahoo! Finance), and its earnings per share (EPS) to be $0.22, as of this writing. What about next year? Analysts are projecting $180.37 billion in revenue and $4.03 in EPS, on average.

Note that at current levels, SpaceX is trading at about 33.3x projected 2027 earnings, which seems reasonable for a company growing as fast as it is. But there is a complication. These projections may already be baked into the share price. After all, despite excellent financial results for as long as it has been public, SpaceX stock has gone nowhere.

The question, then, is whether SpaceX will perform roughly in line with, above, or below expectations over the next 12 months. Let’s consider the bullish case first. SpaceX’s artificial intelligence segment, dubbed Super Intelligence (SI), is booming. The company has more demand for AI compute capacity than it is willing to rent out. Third-quarter SI revenue soared 830% year over year to $7.6 billion. Perhaps the market is underestimating the company’s potential in this industry.

The SI segment could maintain outstanding growth provided SpaceX adds more compute deals to its portfolio. Connectivity is also performing. SpaceX’s push into additional regions within this market could deliver significant subscription growth. Then there is SpaceX’s space segment.

This unit isn’t profitable, but progress on the company’s Starship rocket could be key over the next year. If Starship launch cadence improves meaningfully within the next year, and there are no significant issues with the rocket — regulatory or otherwise — that could be a massive catalyst for the stock.

There are plenty of possible outcomes

The bull scenario might convince the market that SpaceX’s prospects beyond 2027 are very attractive, allowing the company to continue to command high earnings multiples. Assuming the fiscal year 2026 and 2027 predictions are correct, along with a constant forward P/E (based on the following year’s earnings) and projected 2028 EPS of $7.01, the stock could soar by about 74% to $233 by the end of 2027.

In my view, that’s too optimistic. Several factors might hinder SpaceX’s prospects. Revenue and earnings growth could normalize after their blistering recent pace. Launch cadence for SpaceX’s Starship might not reach the levels the market expects, and competition across the company’s business will intensify. That last point is important.

Nobody should expect one of SpaceX’s competitors to catch up to the company in the space launch or connectivity markets within the next year. Still, if they make significant progress, the rocket company might no longer command the same kind of valuation premium. If we make just one change to our model and assume, instead, that the company’s forward P/E drops to 25, SpaceX could gain 31% by the end of 2027. Under this scenario, the company’s share price will be $175.25.

That’s much closer to what may happen, in my view, but here’s the problem: SpaceX’s prospects look attractive, but they are also incredibly uncertain. Beyond the variables already discussed, there is the very real possibility that SpaceX will seek to acquire Tesla (TSLA +1.00%) within the next year. We can’t be sure, and there is no official announcement yet.

But CEO Elon Musk himself has said it would be a good idea and has indicated the formation of independent special committees to weigh the pros and cons of a potential merger between the two companies.

Will a merger be announced? If it is, how much regulatory scrutiny and public backlash will it attract? Nobody knows the answer to these questions yet. With all this uncertainty, SpaceX may well deliver outstanding returns through the end of 2027 or beyond, but it might also be a wealth destroyer. I’d like a much bigger margin of error before buying the stock.