SPCX
Space Exploration Technologies Corp.
$185.00
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 102020.5% above fair value
You pay
$185.00
Bear
$0.17
Fair
$0.18
Bull
$0.19
Bear
$0.17
-99.9%
$0.00 × 18x + net cash
Fair
$0.18
-99.9%
$0.00 × 22x + net cash
Bull
$0.19
-99.9%
$0.00 × 26x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.00)
Implied Market Multiple
102777.8x
Summary
Using 3-year normalized EPS of $0.00 at a 22x cycle multiple, the base-case value is $0.18 per share. P/TBV cross-check: 86.5x.
Warnings
Price-to-book value of 86.5x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
This company has heavy ongoing investment costs. Valuation shortcuts that ignore those costs can make the stock look cheaper than it really is.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing