What SpaceX is really worth, according to the professor called the dean of valuation

MW What SpaceX is really worth, according to the professor called the dean of valuation

By Steve Goldstein

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As with fellow Elon Musk company Tesla, SpaceX valuation is as much about the narrative as the numbers from the prospectus.

Aswath Damodaran, the New York University finance professor with the nickname the "dean of valuation," had estimated, before getting a look at the prospectus, that SpaceX was worth $1.2 trillion.

After poring over the numbers, he arrives at a pretty similar number: $1.3 trillion, or very neatly, $100 per share for SpaceX $(SPCX)$. "If I were to summarize the impact of the prospectus on my SpaceX story, it would be that it has made the story bigger, but also more volatile," he says.

Even $1.3 trillion is a big estimate given the underlying business made less than $7 billion last year, even when excluding interest, tax, depreciation, amortization and other cherry-picked items, though it is less than the $1.8 trillion valuation SpaceX is seeking.

Related: In 'wild' twist, SpaceX won't be allowed early entry to the S&P 500 after all

Damodaran notes the space business has the best unit economics of the three businesses, with a gross margin of 67%, and the connectivity business represented by Starlink has margins of 48%. The AI business not only has the worst gross margins, but were actually falling due to the intense competition in the sector.

Taking that into consideration, he projects going forward that the space business will see margins of 45%, which is an improvement from his initial estimate of 40%. The connectivity business, he estimates, will see 60% margins, because once the satellites that service the business are in space, this is the business that will improve most from scale. He lowered, however, his estimate of AI margins going forward to 25% from 45%, given the increased competition and the high costs of delivering AI services.

Damodaran basically ignores the total addressable market (TAM) calculations in the SpaceX prospectus, just as he says he did for past IPOs including Uber Technologies (UBER) and Airbnb $(ABNB)$. He comes up with a TAM of $3 trillion to $4 trillion for AI products and services, vs. the $26 trillion SpaceX identifies for the AI business.

Damodaran also took a shot at those who complain about the stretched valuation metrics. "SpaceX is a company with small revenues and large losses, and paying a hundred times revenues for it (which is where a $1.8 trillion pricing would put it) seems foolhardy. I have no quarrels with this point of view, which animates old-time value investing, but this perspective comes with a cost in terms of investment choices," he said. Those investors will end up with portfolios of mature and declining businesses.

While for now he will sit on the sidelines, Damodaran said he would reconsider if the stock drops enough. "It is worth remembering that Facebook was selling at half its offering price a few months after its IPO, and that Uber lost more than 50% of its market cap in the year after its public offering, moving both companies from over to under valued," he said.

He also added that the shifting and often unpredictable forces of mood and momentum are also the reason that he would not short the stock.

-Steve Goldstein

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June 05, 2026 05:44 ET (09:44 GMT)

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