[From This Morning's News] SpaceX stock doesn't return to IPO price despite successful launch? The 'valuation yardstick' that changed after going public

If the Starship launch is successful, SpaceX stock should rise immediately. It is tempting to think that way.

However, the stock price fell 2.68% on July 24. It dropped below the June IPO price of $135, and fell to $113.37 (down 1.48%) in after-hours trading.

The conclusion first

The market's valuation axis is shifting from 'future expectations' to 'speed of monetization.'

The launch is important, but a single success cannot sustain a high corporate valuation on its own.

The speed of monetization refers to how quickly communication services generate profit and cash. What to look at next is how quickly Starship boosts Starlink's communication capacity and profits.

Table of Contents

What happened

SpaceX conducted the 13th test flight of its giant Starship rocket on the 24th. This is the first flight since going public.

The highlight this time is the first successful deployment of 20 improved Starlink satellites. Starship is a rocket under development that stands about 120 meters tall and is expected to carry more satellites at once than before.

Meanwhile, SpaceX stock (SPCX) ended regular trading at $115.07, down 2.68% from the previous day. It fell below both the June 12 IPO price of $135 and the first-day closing price of $160.95. The market capitalization is approximately $1.57 trillion according to WSJ market data.

In other words,the technical news that it 'flew' and the stock price judgment that it is 'worth the investment' are separate things.

Correction of expectations reflected in the stock price

On the first day of listing, SpaceX stock rose 19%. At the time, the grand future vision of space transport, satellite communications, and space data centers for AI was being bought.

About six weeks later, the stock price is about 15% below the IPO price. This is not a conclusion that the space business has failed.It can be considered that the market, which bought into expectations first, has entered a phase of waiting for evidence of execution.

A market capitalization of $1.57 trillion is not a scale that can be explained by just a few good launches. It is necessary to accumulate satellite operations, an increase in subscribers, profits, and investment burdens over a long period.

The path from Starship to profit

Organizing it in the following flow makes the relationship between launches and revenue easier to understand.

Regular Starship flights → Mass deployment of V3 satellites → Increased communication capacity → Growth in Starlink contracts, unit prices, and profits → Increased funding for next-generation rocket development

Starlink is an internet service that uses low-Earth orbit (LEO) satellites. LEO refers to orbits relatively close to the Earth's surface, which helps minimize communication latency but requires a large number of satellites and frequent updates.

According to the WSJ, Starlink's 2025 revenue exceeded $11 billion, accounting for over 60% of SpaceX's total. It was also the only profitable segment. The number of subscribers grew from approximately 2 million in 2023 to over 10 million.

This is the crucial point of this test flight. While V3 satellites are designed to handle more data than previous models,they will only contribute to market valuation once they are not just carried into orbit, but translated into communication volume and profit.

Dividing into three layers for Japanese stocks

This perspective can also be applied to Japanese space-related stocks.

In Japan, Mitsubishi Heavy Industries (7011) and IHI (7013) are likely to attract attention as large-cap space and defense stocks, while SKY Perfect JSAT Holdings (9412) occupies a position close to satellite communications.

However, these are not the same companies as SpaceX. The materials to watch also differ.

• Mitsubishi Heavy Industries: H3 rocket launch track record, orders and profitability including defense and aviation

• IHI: Orders and profit margins for aircraft engines, defense, and space components

• SKY Perfect JSAT: Satellite communication contracts, capital investment, and competition/collaboration with LEO services

Overseas, Rocket Lab (RKLB) is a benchmark for launch and space systems. Rather than buying everything based solely on SpaceX's success, the basic approach is to comparethe stage at which each company's orders translate into revenue and profit.

Evidence for changing perspectives

A shift toward a bullish outlook will occur when Starship's test success progresses to regular flights, and the deployment volume of V3 satellites, Starlink's subscriber count, and profit margins all grow in tandem. In the first quarterly earnings report after the early August listing, I will checkto what extent the communication business is covering development costs,rather than just the number of launches.

A shift toward a cautious outlook will occur if flight delays or failures continue, satellite deployment is delayed, subscriber growth slows, or only capital expenditures increase. SpaceX has invested over $15 billion in Starship. Delays in results lead to the burden of additional funding.

Three points to watch today

• SPCX price movement: Can it recover to the IPO price of $135, and will there be underlying news to support it?

• Starship progress: Will V3 satellite deployment move from testing to regular operations?

• Details of related Japanese stocks: Are orders and profit margins actually improving for 7011, 7013, and 9412?

There is no need to rush your investment decision. If there are any confusing terms or points you would like me to delve deeper into next time, please feel free to ask.

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