Morgan Stanley doubled its long-term valuation of SpaceX, a US space exploration technology company. The US investment bank believes that, given SpaceX’s position in the space industry, the company’s valuation can reach at least $100 billion.
Morgan Stanley analyst Adam Jonas wrote in a report to investors: “SpaceX continues to consolidate its position as the’mission control center’ of the emerging space economy. The company Starlink, The huge potential of projects such as the Starship, as well as lucrative government contracts, are important reasons for us to increase its estimated value.”
Morgan Stanley’s latest valuation of SpaceX is twice that estimated before July, but Jonas said: “Since we published that report three months ago, the situation has changed considerably.” During this period of time, SpaceX has completed a series of major milestones, including successfully retrieving the first NASA astronauts from space, winning hundreds of millions of dollars in contracts from the Ministry of Defense, and launching hundreds of Starlink satellites into orbit. Established its global Internet service and conducted two test flights of its next-generation interstellar spacecraft. The company also completed a US$2.1 billion equity financing in August, when its valuation was close to US$44 billion.
Morgan Stanley raised the basic valuation of SpaceX from the previous US$52 billion to US$101 billion, and slightly increased its valuation in the bull market, from the previous US$175 billion to US$203 billion. Even the most unlikely bear market valuation has increased from the previous 200 million US dollars to 5.4 billion US dollars.
Morgan Stanley estimates that under basic conditions, SpaceX’s rocket launch business is valued at US$11.7 billion, Starlink’s satellite Internet business has grown to US$80.9 billion, and the peer-to-peer space travel business is valued at US$8.7 billion. In a bull market situation, the value of rocket launch business will increase to 52.5 billion U.S. dollars, Starlink’s business will jump to 132.8 billion U.S. dollars, and the point-to-point travel business will be worth 17.4 billion U.S. dollars.
So far, SpaceX has launched 18 missions in 2020, and in recent years the company has accounted for most of the global satellite launch market. In addition, SpaceX has steadily broken through the boundaries of reusing rockets, most notably reducing the cost of rocket boosters. So far, SpaceX has recovered 55 rocket boosters and flew 40 more times. Jonas said: “SpaceX is widely regarded as a low-cost launch service provider in the global launch market.”
Morgan Stanley predicts that by 2040, SpaceX will be able to launch rockets every day. In 20 years, each launch of SpaceX will bring in $67 million in revenue and an operating profit margin of 20%. This depends largely on the success of its interstellar spacecraft project. Jonas estimates that the full development of the interstellar spacecraft will cost between US$5.6 billion and US$8 billion, and one of its advantages will be the ability to launch 400 Starlink satellites at the same time. Morgan Stanley raised its expected valuation of the Starlink project from the previous USD 42 billion to USD 81 billion.
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