SpaceX shares closed Monday at $87.20, down 49.7% from their February IPO pricing of $173.50, marking one of the steeper declines among large-cap tech debuts in the past eighteen months. The company reports first-quarter earnings Thursday after market close, the first time Wall Street will see consolidated revenue and margin data from its combined launch services, Starlink satellite internet, and government contracts business lines.
The stock peaked at $194.80 on March 12, two weeks post-IPO, then unwound as analysts digested the company's $42 billion capital expenditure guidance through 2027 for Starship development and second-generation Starlink satellite production. Trading volume spiked 320% above the 30-day average last Wednesday after Morgan Stanley downgraded the stock to Equal Weight, citing deferred profitability in the Starlink consumer segment and slower-than-modeled Starship reusability economics. The firm lowered its price target from $180 to $95.
The earnings call matters because SpaceX has never disclosed segment-level margins or cash conversion metrics. Investors are pricing two uncertainties. First, whether Starlink's 2.3 million subscribers as of December can sustain the $18 billion the company is spending annually on satellite production and ground infrastructure while maintaining the 60% gross margin Musk referenced in a September pre-IPO interview. Second, whether Falcon 9's 96 launches in 2024 represent a plateau or a launchpad for Starship's commercial payload ramp, which determines whether SpaceX can justify its current $140 billion market cap on a forward revenue multiple basis.
Most analysts expect the company to report Q1 revenue between $4.8 billion and $5.2 billion, with consensus at $5.0 billion, driven primarily by $2.1 billion in launch services and $1.9 billion from Starlink subscriptions. The margin question hinges on whether consolidated EBITDA comes in above $900 million, the threshold at which the company's leverage ratio stays below the 3.5x covenant in its recent $5 billion term loan facility. If EBITDA prints below $850 million, it would imply Starlink is burning more cash than the launch business generates, forcing a capital allocation conversation that could pressure the stock further.
Operators should watch three specifics Thursday evening. First, any revision to the 400 Starship orbital flights Musk projected for 2025-2026, which directly impacts payload economics and the NASA Artemis timeline. Second, commentary on Starlink's unit economics in Latin America and Southeast Asia, where the company cut subscription prices 15% in January to accelerate adoption but has not disclosed churn or customer acquisition cost. Third, whether CFO Bret Johnsen addresses the $12 billion in deferred revenue on the balance sheet, most of which ties to multi-year government launch contracts that convert to recognized revenue based on mission completion, not billing.
The stock is now trading at 12.6x forward revenue, in line with defense primes like Lockheed Martin and below the 18x multiple it carried at IPO. If Thursday's call clarifies Starlink's path to standalone profitability by mid-2026, the valuation gap narrows. If it does not, the next support level is $78, where the stock traded during its final private round in November 2023.
The takeaway
SpaceX's 50% post-IPO decline turns Thursday's earnings into a margin credibility test for Starlink and Starship economics.
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