Here are the 5 latest forecasts for SpaceX stock

Since SpaceX (NASDAQ: SPCX) hit the market in June, over 30 Wall Street investment firms have initiated analyst coverage of the stock. Share price forecasts vary wildly – the highest in the analyst community is $800, while the lowest is $75.

Here, I’m going to take a look at the five latest forecasts. Let’s see where these brokers see the space stock heading in the next 12 months.

SpaceX forecasts

I’ve put the five latest forecasts in the table below. As you can see, they’re a real mixed bag.

On one hand, we have Morgan Stanley with a Buy rating and a $300 price target (+122% from here). On the other, we have Phillip Securities with a Sell rating and a target of $75 (-44% from here).

Bulls versus bears

While this broad range of forecasts may be a little confusing, it confirms one thing and that is that SpaceX is a divisive stock. Ultimately, there are bulls and bears.

The bulls generally argue that SpaceX is a wide-moat technology business with an unassailable lead in the rocket launch and satellite broadband industries. These investors expect revenues to soar in the years ahead and therefore have high price targets.

The bears, by contrast, generally look at the current market cap of $1.8trn and see the valuation as stretched. Many acknowledge that this is a special company. However, at a forward-looking price-to-sales ratio of 40, they believe it’s trading well above its intrinsic (true) value.

Where do I stand?

Personally, I can see both views.

If I focus on the long term, I see a ton of potential here. As the portfolio managers of the Scottish Mortgage Investment Trust (where it’s the largest holding) recently said in a research note, SpaceX is positioning itself at the intersection of launch, energy, and AI in a way that no other company on Earth can replicate.

Yet, if I focus on the set-up today, the stock does look overvalued. I definitely think there’s a chance that the share price could fall from here – I wouldn’t be surprised to see it drop to near $100 again.

How am I going to play it?

As for how I’m going to play the stock, I’m going to watch it closely in the near term. If it were to fall back to near $100, I could be tempted to start a very small position as a long-term (10+ years) play.

The way I see it, the lower I can get in at, the better. Because the current valuation really doesn’t leave any room for error.

I suspect that the company will grow into its valuation over time, though. Looking at forecasts, revenues and earnings are projected to rise significantly in the years ahead.

So, a small position at a good price could pay off down the track. As revenues and earnings grow, the stock could take off.

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Edward Sheldon owns shares in Scottish Mortgage Investment Trust.