Analyst explains why SpaceX stock is down today

Investing.com -- With SpaceX shares down over 11% premarket on Wednesday, Piper Sandler told clients in a note Wednesday that the decline, despite strong results, points to an upcoming surge in tradable stock and heavy capital spending rather than any weakness in the quarter.

Analyst Alexander Potter noted the company "easily beat consensus" in its first earnings call, with second-quarter revenue up about 92% year over year to $7.8 billion, roughly $1 billion ahead of estimates, and adjusted EBITDA of $3.5 billion, up 191%.

Gross margin rose to 55% and the EBITDA margin reached 45%. The CFO said SpaceX will reach a run-rate of at least $100 billion a year in recurring revenue by December, implying upside to consensus.

Yet the stock trades down premarket, which Piper Sandler attributed to three factors. These are a coming increase of more than 140% in the number of tradable shares, fiscal 2027 capex likely around $65 billion, about $17 billion higher than expected, and lucrative but cancelable AI cloud contracts whose "staying power" is hard to gauge.

The firm said less than 5% of SpaceX's total shares can currently be freely traded, a figure set to rise to about 50% by June 2027, leaving a "lockup expiration overhang" as a valuation headwind. As long as the float keeps growing, Piper Sandler warned, "the multiple may not correlate with fundamentals."

While boosting its estimates, the firm cut its target multiple to 12 times from 20 times 2031 EV/EBITDA, matching Tesla's all-time low, which it now views as a better reference given the after-hours action.

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