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Posted On: 04/19/2017 11:29:03 PM
Post# of 2218
#3// Massive SpaceX Market Valuation Will Depend on These 2 Factors
By ALEX MCGUIRE, Associate Editor, Money Morning • @AlexMcGuire92 • April 18, 2017
https://moneymorning.com/2017/04/18/massive-s...2-factors/
First SpaceX Market Valuation Factor: Revenue Projections
The first factor that will determine SpaceX's valuation to investors is the firm's projected revenue.
You see, most of SpaceX's revenue right now comes from big contracts with agencies that need its rockets. For example, NASA paid $2.6 billion in 2014 for SpaceX to launch payloads to the International Space Station (ISS) orbiting the Earth. These payloads – which are basically supply shipments – are delivered to the ISS via Falcon 9 rockets and often include probing devices, satellites, and other tools.
As of February, SpaceX has a backlog of 70 supply missions worth a combined $10 billion, according to Fortune. To meet this demand, the company announced on Feb. 6 that it would begin launching a Falcon 9 once roughly every two or three weeks. That's the fastest rate of launches ever for the Falcon 9 model.
While Fortune reports that the 70 backlogged orders are worth $10 billion, SpaceX's official website says it costs customers like NASA roughly $62 million per Falcon 9 launch. If you multiply that cost by those 70 orders, SpaceX could potentially be looking at future revenue of roughly $4.3 billion. That crushes competitor Blue Origin's estimated annual revenue, which business crowdsourcing site Owler estimates is around $69 million.
Those massive revenue projections will certainly have investors clamoring for SpaceX stock once the firm files to go public. The high demand for shares will result in a huge SpaceX market valuation.
But the second factor determining the company's value is even more significant. It deals with SpaceX's deeply rooted goal to colonize Mars, which means this factor could make or break the firm's long-term profitability.
By ALEX MCGUIRE, Associate Editor, Money Morning • @AlexMcGuire92 • April 18, 2017
https://moneymorning.com/2017/04/18/massive-s...2-factors/
First SpaceX Market Valuation Factor: Revenue Projections
The first factor that will determine SpaceX's valuation to investors is the firm's projected revenue.
You see, most of SpaceX's revenue right now comes from big contracts with agencies that need its rockets. For example, NASA paid $2.6 billion in 2014 for SpaceX to launch payloads to the International Space Station (ISS) orbiting the Earth. These payloads – which are basically supply shipments – are delivered to the ISS via Falcon 9 rockets and often include probing devices, satellites, and other tools.
As of February, SpaceX has a backlog of 70 supply missions worth a combined $10 billion, according to Fortune. To meet this demand, the company announced on Feb. 6 that it would begin launching a Falcon 9 once roughly every two or three weeks. That's the fastest rate of launches ever for the Falcon 9 model.
While Fortune reports that the 70 backlogged orders are worth $10 billion, SpaceX's official website says it costs customers like NASA roughly $62 million per Falcon 9 launch. If you multiply that cost by those 70 orders, SpaceX could potentially be looking at future revenue of roughly $4.3 billion. That crushes competitor Blue Origin's estimated annual revenue, which business crowdsourcing site Owler estimates is around $69 million.
Those massive revenue projections will certainly have investors clamoring for SpaceX stock once the firm files to go public. The high demand for shares will result in a huge SpaceX market valuation.
But the second factor determining the company's value is even more significant. It deals with SpaceX's deeply rooted goal to colonize Mars, which means this factor could make or break the firm's long-term profitability.
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