Key Points

Raymond James analyst Brian Gesuale launched coverage on SpaceX with the highest price target on the Street at 800 dollars.
The optimistic outlook hinges on clearing multiple important engineering challenges.
SpaceX shares trade at elevated levels especially given reliance on technology still under development.
10 stocks we prefer over Space Exploration Technologies

Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX, has rapidly emerged as one of the most notable stocks to reach the market recently. The rocket launch satellite communications and artificial intelligence company attracted strong interest ahead of its public listing. Even after raising 85.7 billion dollars the offering was more than four times oversubscribed according to reports. In other words interest exceeded available shares by a wide margin.

The appeal is clear. Investors seek early entry into a rare company with potential to scale dramatically. After pioneering reusable rockets SpaceX aims to place data centers in orbit which could reshape industries.

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One Wall Street analyst described SpaceX as one of the defining industrial infrastructure companies of the 21st century with more than 400 percent upside potential that could expand its market value beyond 10 trillion dollars. We examine whether this view holds.

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Raymond James rates SpaceX a buy

Raymond James analyst Brian Gesuale began coverage with a strong buy rating and a leading price target of 800 dollars. This implies gains of 435 percent from Tuesday close.

The analyst sees commercialization of space travel alongside AI potential creating the biggest infrastructure shift since the internet emerged.

Central to the positive case is Starship the next generation spacecraft that could make cargo transport to orbit far more accessible. Gesuale estimates Starship will cut transport costs to space by 99 percent while boosting payloads by ten times.

The analyst compares this to past industrial shifts such as electricity railroads and the internet. Starship could turn SpaceX into a transport network with aviation style operations and steadily falling costs.

Gesuale points to SpaceX powerful infrastructure cycle noting that Falcon rockets supported Starlink which now funds Starship and Starship will enable future platforms.

Numbers show revenue rising from 38.5 billion dollars to 837 billion dollars nearly 22 times higher while EBITDA could jump more than 39 times from 17.7 billion dollars to 696 billion dollars.

Does the analyst view hold?

The case is logical in principle yet carries a key condition. The cycle works only if SpaceX fully develops a reusable Starship and that remains uncertain. The large rocket is still testing with its 12th flight completed and no firm completion date set.

Another factor is successful placement of data centers in orbit. Experts note major engineering tasks remain including orbital design radiation hardened chips and high power lasers for data transmission to Earth. Missing any milestone could limit future results.

Citi analyst John Godyn holds a buy rating and 200 dollar target but outlined a path to 900 dollars if SpaceX meets key engineering goals at scale.

Consider Tesla repeated delays with unsupervised full self driving. CEO Elon Musk once forecast full autonomy by 2018 and one million robotaxis by mid 2025 yet progress continues.

The upside exists and betting against Musk carries risk but outcomes depend on many elements aligning and a single setback could derail plans.

Trailing twelve month revenue stands at 19.3 billion dollars so SpaceX trades at 102 times sales and about 42 times projected 2026 sales. This valuation appears high for a firm still facing notable challenges.

Should investors buy Space Exploration Technologies shares now?

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Citigroup is an advertising partner of Motley Fool Money. Danny Vena CPA holds positions in Tesla. The Motley Fool holds positions in and recommends Tesla. The Motley Fool maintains a disclosure policy.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq Inc.