Morgan Stanley Nearly Doubles Musk's SpaceX Valuation to Over $100 Billion
Morgan Stanley’s Adam Jonas has raised his valuation of SpaceX as Elon Musk's company "continues to solidify its place as 'mission control' for the emerging space economy." Changes in the underlying assumptions in the Launch and especially Starlink units have made Jonas raise the base-case enterprise value of SpaceX to just over $101 billion, nearly doubling his prior $52 billion valuation. The analyst's bull-case scenario sees SpaceX valued at about $203 billion, up from $175 billion.
Jonas takes note of four key developments that occurred in the past 4 months:
- Starlink LEO constellation deployment, capabilities and build up to beta test;
- Starship manufacturing industrialization and test flights in Boca Chica, Texas;
- Continued strong momentum in winning government (NASA, DoD) contracts;
- Accelerating capital raising activity including a recent $1.9bn equity offering.
The analyst believes that SpaceX has made progress towards creating an economic and technological flywheel. Jones believes that Starlink is now worth over $80 billion.
“SpaceX’s Starlink project has continued to widen the lead vs its LEO mega-constellation peers in several key areas as it works towards offering residential broadband services to unserved/underserved households,” Jonas writes in today’s note, before adding five key areas where Starlink made progress recently:
- Aggressive launch pace;
- Successful private beta with strong demand fora public beta;
- Approval to bid in the FCC’s Rural Digital OpportunityFund (RDOF) auction;
- Inter-satellite link testing;
- DoD award for missile tracking satellites.
“It is clear to investors and industry observers that SpaceX’s launch cost advantages are being used to accelerate deployment of its LEO broadband network. As the company achieves pole position in LEO, which many believe is a winner take most (if not winner take all) arena due to a host of technological and physical factors (i.e. scale economies, limited orbital slots, congestion, orbital debris,etc.), the promise of a viable and capable satellite broadband service increases, helping the company attract large amounts of capital at attractive rates, further enabling development of even more capable launch architectures (Starship) that further deepens and widens the moat in satellite launch costs,” Jonas said in today’s note.