SpaceX's first-ever earnings report comes with stock under pressure: Q2 preview.
SpaceX's first-ever earnings report comes with stock under pressure: Q2 preview
SpaceX is set to release its highly anticipated second quarter results on Tuesday after the bell, marking its maiden public company earnings report. The stock has been experiencing a significant downturn since its market debut last month, having shed nearly 30% from its initial $150 valuation and remaining down about 50% from its all-time high of $225.64. Investors are eagerly awaiting the results to find any potential catalyst that might reignite the stock's performance.
The company’s stock began the week on a positive note, closing higher on Monday and continuing to rise in pre-market trading. However, despite the optimistic start, concerns remain over the upcoming earnings report. According to Epistrophy Capital's Cory Johnson, "On Tuesday afternoon, SpaceX (SPCX: NASDAQ) reports as a public company for the first time, and two days later, its lockup frees hundreds of millions of insider shares — roughly triple the current tradable float." This lockup expiration will release up to 20% of shares for sale, potentially putting additional pressure on the stock.
In terms of financial expectations, Bloomberg consensus estimates SpaceX's Q2 revenue at $6.81 billion, an increase from the previous quarter’s $4.7 billion. The company is also expected to report an adjusted loss per share of $0.24 and an adjusted EBITDA of $2 billion. Analysts are particularly focused on SpaceX's spending patterns. Melissa Otto from S&P Global Visible Alpha notes that "SpaceX's capex numbers are expected to increase from $48.7 billion this year to $118.4 billion in FY 2028." Additionally, the company’s overall debt is projected to grow over five times, from $41.7 billion this year to more than $218.0 billion in fiscal year 2028.
The large capital requirements of SpaceX and similar companies raise concerns about whether such investments will yield a healthy return given the substantial cash outlay required. Another key area of focus is SpaceX's satellite broadband service, Starlink, and its plans for future launches with Starship. Elon Musk has announced that SpaceX intends to attempt a tower catch of a Starship upper stage during Flight 14, using Mechazilla arms at Starbase. Deutsche Bank analyst Edison Yu estimates a target window in late August or September for this mission.
Beyond the immediate earnings report, the broader implications of SpaceX's future are also under scrutiny. There is speculation about potential mergers with other Musk-led companies, such as Tesla (TSLA), and how these might impact SpaceX’s business operations. The Wall Street Journal reported that executives are considering options to dispose of Tesla's China business in case a merger occurs. Furthermore, SpaceX's government and national defense contracts could pose concerns for the Chinese government.
Pras Subramanian, Lead Transportation Reporter for Yahoo Finance, concludes that while the upcoming earnings report is crucial, it will be part of a larger landscape of challenges and opportunities facing SpaceX as it transitions to public company status.
