SpaceX’s first earnings report as a public company confirmed what investors already knew: This is an extraordinary satellite-communications company wrapped in an exorbitant valuation.
SpaceX reported second-quarter revenue of $7.8 billion, up 92% from the year-ago period. Starlink subscriptions doubled to 12 million, while government and enterprise business continued to expand. That is undeniably impressive growth. Yet SpaceX still recorded a quarterly net loss of $541 million as spending on research, infrastructure and artificial intelligence drags on what would otherwise be a profitable rocket and communications company.
In fact, absent AI, the Starlink arm of SpaceX (“Connectivity” in their filing) more than covers the cost of investments being made on the rocket launch (“Space”) side of the ledger.
A Great Company Wrapped in a Challenging Stock
At a market capitalization of $1.5 trillion even after the post-IPO softness, SpaceX is valued at just above 80 times the $18.7 billion of revenue it generated in 2025. Using this year’s estimates ($41.2 billion), the valuation comes in at more than 36 times revenue.
Both multiples are sky high.
A price-to-sales multiple that high does not merely assume SpaceX will remain the leading launch provider and satellite-internet operator. It assumes the company will convert that leadership into decades of enormous revenue growth, exceptional margins and durable competitive advantages, all while successfully funding Starship, replenishing a vast low-Earth-orbit constellation and pursuing capital-intensive AI projects.
At today’s price, investors are not paying for the SpaceX that exists. They are pre-paying for several future versions of SpaceX, nearly all of which must succeed.
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The Viasat (VSAT) Reality Check
One of the challenges of valuing a company like SpaceX is that it really doesn’t have a clean comparison.
That said, looking at a company like Viasat (VSAT) provides a useful comparison because it provides a benchmark of sorts as to how public markets ordinarily value a mature satellite-connectivity and defense-communications business.
Viasat generated $4.64 billion in revenue during its 2026 fiscal year (ended March 31, 2026); the company also just reported Q1 FY 2027 revenue of $1.16 billion, which annualizes to the same $4.64 billion. Its market capitalization is, at the time of writing, $11.2 billion. That means the market is valuing Viasat at roughly 2.4 times annual sales.
SpaceX, based on its 2025 revenue, trades at roughly 80 times sales.
In other words, investors are paying approximately 33 times more for each dollar of SpaceX revenue than for each dollar of Viasat revenue.
SpaceX clearly deserves a premium. It is growing much faster. Starlink has greater consumer momentum. SpaceX dominates commercial launch activity, benefits from reusable-rocketry expertise and has opportunities that Viasat doesn’t. Starlink alone generated an estimated $11.4 billion of SpaceX’s 2025 revenue and represented about 61% of the company’s total.
But deserving a premium and deserving an almost 80-times-sales valuation are different propositions.
Viasat’s slower growth, debt burden, satellite deployment risks and legacy infrastructure justify a substantial discount. Even granting SpaceX a valuation of 10 times revenue—four times Viasat’s current multiple—the company would be worth approximately $187 billion based on 2025 sales.
At 20 times sales, it would be worth approximately $374 billion.
To justify a $1.5 trillion valuation at a still-generous 10-times-sales multiple, SpaceX would eventually need to produce $150 billion in annual revenue. At a more conventional five-times-sales multiple, the required revenue rises to $300 billion.
The market is effectively assuming that SpaceX will become not simply the best satellite company, but one of the largest and most profitable technology and communications platforms in history.
Starlink Is the Business—For Now
The bullish SpaceX narrative is built around Mars, Starship and the transformation of human civilization. The financial reality is more terrestrial: Starlink pays the bills for every moonshot SpaceX takes.
Starlink accounted for an estimated $11.4 billion of SpaceX’s $18.7 billion in 2025 revenue and was the company’s core profit center. By comparison, launch revenue was reportedly about $4.1 billion in 2025 (and was $962 million in the most recently reported quarter).
So while much of the promise of SpaceX is the Starship/AI narrative that presents the company as a collection of revolutionary businesses, most current revenue still comes from one satellite-connectivity platform.
Starlink is a formidable asset, but it is also a capital-intensive telecommunications network. Satellites must continually be manufactured, launched and replaced. Consumer growth eventually encounters affordability, geography and capacity constraints. Governments can regulate access. Rivals can emerge and pressure pricing. New technologies can render the whole network obsolete.
Can Growth Outrun the Valuation?
The bullish counterargument is straightforward, even if it’s not particularly compelling: SpaceX is growing so quickly that traditional valuation metrics simply don’t matter.
That counterargument, at least based on the share price, certainly appears true in the short term. But unless Elon Musk can drive sustained investor interest and deliver on some of the technological promises he’s making, I suspect investors will care about valuation in the future.
Suppose SpaceX grows annual revenue from $18.7 billion to $100 billion. That would be an extraordinary achievement—more than a fivefold increase. At a $1.5 trillion market capitalization, the stock would still trade at 15 times sales.
If revenue eventually reaches $150 billion, the multiple falls to 10 times sales. But even that more modest multiple fails to account for dilution, ongoing capital expenditures, operating losses, execution risk and the time required to reach that scale. A dollar of hypothetical revenue in 2028 or 2030 is not worth the same as a dollar of revenue today.
It’s entirely possible that at some point in the future, SpaceX delivers on the promises the company is making about the future, but investors are being asked to foot that bill today.
That calculus works perfectly when every project is advancing, capital remains abundant and investors continue assigning premium multiples to distant opportunities.
It works less well when the market begins asking what the existing businesses earn today.
What Is Already Priced In?
SpaceX does not need to fail for SPCX shares to disappoint.
Starlink can continue adding customers. Launch revenue can rise. Government contracts can expand. SpaceX can remain the most strategically important aerospace company in the United States (or even the world).
The stock could still be overvalued.
Because at a $1.5 trillion market cap, investors are pricing shares as if that enormous success is a foregone conclusion.
The base case essentially requires SpaceX to achieve global Starlink dominance, continued launch leadership, successful Starship commercialization, major government and defense expansion, profitable AI infrastructure and the absence of a serious regulatory, technical or competitive setback.
Investors are paying today for revenue streams that may not exist for years – and some that may never exist at all, or at least pan out the way the bulls hope.
They Are Who We Thought They Were
SpaceX’s earnings showed a rapidly growing company with world-class assets, significant operating losses and an appetite for enormous spending, all while commanding an astronomical valuation.
That is exactly who we thought they were.
The market’s mistake is treating confirmation of the company’s potential as confirmation of the stock’s price.
SpaceX deserves to be worth more than Viasat. It deserves a higher sales multiple, a larger strategic premium and considerable credit for technologies no competitor has replicated at comparable scale.
But the gap between Viasat’s roughly 2.4-times-sales valuation and SpaceX’s approximately 80-times-sales valuation is not more than just a premium; it is a bet on near-perfect execution across multiple industries over many years.
SpaceX may someday grow into that expectation.
The latest earnings show it has not done so yet.
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