SpaceX, the private aerospace manufacturer and space transport services company, is gearing up for its highly anticipated Initial Public Offering (IPO). However, according to NYU Stern professor Aswath Damodaran, also known as the “Dean of Valuation,” the company’s valuation may be exaggerated by 30%.
The Valuation Breakdown
Damodaran has published a valuation of SpaceX at $1.2 trillion, which is roughly a third below the $1.75 trillion to $2 trillion range the company is reportedly targeting for its IPO. To arrive at this figure, Damodaran broke down the company into three main businesses:
- Space launch
- Starlink
- xAI (which SpaceX absorbed in February)
He also considered an “expansion option” for adjacent markets like space travel.
Revenue Projections
Damodaran’s model predicts that SpaceX’s revenues will climb from $15.6 billion in 2025 to approximately $320 billion a decade later, with a consolidated operating margin near 48%. Starlink is expected to drive the majority of the revenue, making up around 65% of 2025 revenues, while the rockets are expected to contribute 30%.
Market Expectations
Traders, however, seem to disagree with Damodaran’s valuation. Polymarket’s SpaceX valuation contract prices the $1.75 trillion to $2 trillion bracket at 48%, while Damodaran’s number falls into the $1.25 trillion to $1.50 trillion bucket, which traders are pricing at 11%.
The IPO Outlook
A separate contract gives SpaceX a 90% probability of being the largest 2026 IPO by market cap, and traders expect the IPO to be completed by the end of June. With the IPO on the horizon, investors are eagerly awaiting the opportunity to buy into the company.
The Musk Factor
Damodaran, who has owned Tesla since 2019, has called SpaceX Elon Musk’s “most impressive contribution.” However, he also warned investors not to cherry-pick, stating that “you get the package. You get the Musk package, the good stuff, the bad stuff.” This package will now include supervoting shares, as SpaceX is listing under a dual-class structure that gives Musk 10 votes per share against one vote for outside investors.
Uncertainty and Simulation
To account for the uncertainty surrounding the valuation, Damodaran ran a Monte Carlo simulation that produced a range from $660 billion to $2.8 trillion, with a median of $1.28 trillion. A $1.75 trillion IPO would land at the upper end of this distribution. Damodaran stated that he would be “reluctant to buy SpaceX” at that price, but would consider buying closer to $1 trillion.