Is SpaceX Really Worth $74 Billion? Forbes – Forbes

UKRAINE - 2021/02/21: In this photo illustration a Spacex logo is seen on a smartphone and a pc ... [+] screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Elon Musks privately held rocket company SpaceX raised around $1.16 billion via equity funding over the last two months per SEC filings, with the company now reportedly being valued at $74 billion. This compares to a previous valuation of $46 billion based on a $2 billion fundraise last August. So what has really changed for SpaceX to command a 60% jump in valuation?

See our dashboard analysis detailing SpaceXs Revenues and Valuation for the underlying numbers on launches, revenues per launch, and valuation multiples.

There is an increasing shift from government-driven space programs toward enterprise-backed programs and SpaceX has a nice track record of winning contracts from government agencies, particularly from NASA and the U.S Department of Defense. Starlink, the companys satellite-based Internet service - which we see as a big driver of SpaceXs long-term potential - went into beta testing a few months ago and should start generating revenues this year. (related Starlink Valuation: What Could SpaceXs Starlink Service Be Worth) We also expect SpaceXs total number of launches to grow this year, with total revenue expanding to about $1.6 billion. Moreover, new areas such as space travel and point-to-point transport around the earth are also on SpaceXs radar and could help revenues in the medium to long term.

There are likely some market-related factors driving SpaceXs valuation as well. With interest rates still remaining low compared to historical levels, investors have a greater appetite to bet on futuristic companies working on the cutting-edge and moonshot projects. This is likely helping SpaceX. Moreover, investors likely view SpaceX as a solid play on the emerging space economy. Although there are other publicly listed plays on Space, SpaceX has a strong record of innovation and execution, having the distinction of carrying out the first commercial manned launch, while raising the bar for reusable rocket technology.

[2/2/2021] How Is SpaceXs Starlink Service Shaping Up?

SpaceXs satellite-based Internet business, Starlink, is seen as the biggest driver of the space exploration companys valuation, given its large addressable market. (Related: SpaceXs Revenues and Valuation) So how is the service shaping up? Starlink went into beta testing about four months ago, providing services in the northern United States, Canada, and some parts of Europe and the company says that it now has over 10,000 users globally. SpaceX charges beta customers $99 per month, and theres also an upfront charge of about $500 that goes towards the satellite dish and related kit. The company is reporting speeds of between 50 to 150 Mega bits per second on the service. While this makes Starlinks service pricier and slower than some mainstream broadband offerings, both metrics are likely to improve as the company builds scale (more satellites and ground stations) and signs on more users. The company has already launched over 1,000 working satellites for Starlink and intends to have a total of around 42k satellites once the project is complete. SpaceX was recently awarded close to $900 million in subsidies by the FCC, under the Rural Digital Opportunities Fund which aims to bring high-speed Internet across the U.S., particularly in rural areas. This could also help the economics of the service, to a certain extent. That said, competition is also mounting. Wireless carriers have been betting big on 5G technology which can offer gigabit-speed internet over wide areas, competing head-on with the fixed-line internet services. It remains to be seen if SpaceXs service can offer customers an attractive value proposition as competition increases.

View our interactive dashboard analysis, Starlink Valuation: What Could SpaceXs Starlink Service Be Worth? to modify our key assumptions to arrive at your own estimate for Starlinks valuation as it heads toward an IPO.

[Updated 2/12/2020] How Much Value Could SpaceX Unlock From Starlinks Proposed IPO?

SpaceX recently indicated that it could spin off and pursue an IPO for its satellite-based Internet business, Starlink. The Starlink service, which is likely to see operations begin later this year, aims to provide high-speed Internet globally in a cost-effective manner by leveraging a constellation of several thousand satellites. While SpaceX has not given a definitive timeline for an IPO, it has indicated that it could occur within the next few years. According to our analysis, we estimate that Starlink could be worth about $30 billion by 2025, assuming it generates revenues of about $10.4 billion then and is valued using a P/S multiple of about 3x. Below, we provide a breakdown of the opportunity Starlink provides to SpaceX and the potential risks.

View our interactive dashboard analysis, Starlink Valuation: What Could SpaceXs Starlink Service Be Worth? to modify our key assumptions to arrive at your own estimate for Starlinks valuation as it heads towards an IPO.

Why Starlink is Crucial To SpaceX

Estimating Starlinks Valuation

We project that Starlinks first full year of service will be 2021, with coverage spanning a large portion of the global population by 2025. We also expect that Starlink will primarily compete with fixed-line broadband services, as its receivers are expected to be somewhat large for truly portable use (likely pizza-box sized).

2.1 Estimating Starlinks Total User Base

2.2 Estimating Starlinks Revenues

Monthly ARPU

2.3 Estimating Starlinks Valuation using a P/S Multiple

What Are The Key Risks Associated With Starlink?

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Is SpaceX Really Worth $74 Billion? Forbes - Forbes