As investor interest builds around SpaceX’s highly anticipated IPO taking place this week, Morningstar has published two new pieces of research examining both the company’s per share valuation and its largest growth driver, Starlink.
Together, Morningstar’s analysis highlights a major disconnect between market expectations and underlying fundamentals. While SpaceX has claimed a total addressable market of $1.6 trillion for Starlink, Morningstar estimates the segment’s realistic global opportunity at about $129 billion. Additionally, Morningstar values SpaceX at $63 per share, representing a significant discount to the anticipated IPO price of $135 per share.
According to Michael Field, Chief Equity Strategist at Morningstar: “Investors are naturally excited about the SpaceX IPO, but with investment bankers suggesting a 1.75 trillion valuation, we believe it’s overvalued. Investors should sit this one out and wait for a more attractive entry point down the line.
“We believe the business has real strengths, particularly in Starlink, but with so many unknown and untested technologies underpinning much of the valuation price, particularly within the AI business, we think the valuation is extremely speculative.”
Key takeaways from Morningstar’s “How High Can This Unicorn Fly? Our Detailed SpaceX Valuation Analysis” report are highlighted below.
Morningstar’s fair value estimate for SpaceX stands at $63 per share, implying a discount of around 53% to the anticipated IPO pricing. However, Morningstar notes that even this valuation already assumes a number of favourable outcomes, including the successful reusability of Starship and the commercialisation of orbital data centres — developments that are not expected to be fully proven in the near term.
In its most optimistic “moonshot” scenario, Morningstar estimates SpaceX could be worth as much as $1.97 trillion, equivalent to $154 per share. Nevertheless, the research assigns only a 7% probability to this outcome materialising.
Highlights from Morningstar’s “Testing the Sky’s Limits: Our Realistic Starlink Market Sizing” piece include:
Morningstar estimates Starlink’s realistic global market opportunity at approximately $129 billion, significantly below SpaceX’s own $1.6 trillion estimate. The research argues that technical limitations and unit economics are likely to restrict the business largely to lower-density markets.
According to Morningstar, Starlink is best positioned to serve rural and underserved connectivity markets, with limited ability to compete effectively in densely populated urban telecom markets because of capacity constraints. Despite these limitations, the firm still forecasts 7.5x revenue growth to $85 billion by 2035, driven by niche broadband demand, enterprise use cases and partnerships with telecom carriers.
Readers can find the full Morningstar SpaceX valuation report here, and the Starlink piece here.
