Pre-IPO debate on SpaceX: Morningstar and the "Valuation Guru" think it's too expensive; long-term narrative is optimistic about the market

Mars Finance News, June 12 — Today, SpaceX IPO was priced at $135, implying a valuation of approximately $1.77 trillion. Predictions from well-known institutions and analysts regarding its performance after listing are as follows:

Morningstar analyst Nicholas Owens: Morningstar values SpaceX at about $780 billion, roughly 55% lower than the IPO valuation of about $1.77 trillion. He believes the shares are overvalued in the near to medium term under almost any scenario. He expects early trading to be supported, or even to rise briefly, due to extremely limited float and rapid inclusion in indices (such as the Nasdaq 100). However, overall he advises investors to avoid chasing gains at the open and to wait until the hype fades before entering at lower prices, so that there is a chance to achieve more attractive long-term returns.

Aswath Damodaran, a professor at New York University, “Valuation Guru”: He estimates the value of SpaceX equity at $1.25–1.3 trillion, far below the IPO pricing. Damodaran believes the current pricing is too high and will not buy immediately (but also will not short). He expects a significant pullback after listing similar to Facebook or Uber (which once fell by over 50%). He advises patience to wait for lower levels; while SpaceX’s AI business makes its story grander, it also increases volatility, and short-term performance may face downward pressure.

Jim Cramer, host of CNBC’s Mad Money: He takes a cautious view of the fundamentals and finds it difficult to evaluate a valuation at roughly $2 trillion, or about 100 times sales. He predicts that, due to retail FOMO, extremely limited float, and inflows from passive index funds, the open could see enormous gains—or even double to a market cap of about $4 trillion. But he warns that this could be a speculative bubble that is destructive to the market. He strongly advises retail investors to avoid chasing highs, as long-term business loss pressures may lead to a pullback.

Timothy Horan, an analyst at Oppenheimer, an independent investment bank in New York: He gives a rating “outperform” relative to the broader market, with a target price of $190—about 41% upside from the $135 IPO price. He is highly optimistic about SpaceX’s vertical integration across rockets, Starlink, chips, and AI, and expects the total market size to reach $10 trillion by 2035. Although he notes volatility risks, he believes the stock can gain support after the market opens and achieve significant upside, with an optimistic outlook for long-term growth.

John Blank, Chief Equity Strategist at Zacks, an independent research firm in Chicago: He expects that after SpaceX’s listing there may be a significant downside move. If the stock price falls by 40–60% within a few months, it will trigger a cascading reduction in earnings forecast revisions. John views this as a potential signal of a market top. Short-term performance may face pressure, and he advises investors to remain cautious and wait for clearer fundamental confirmation.

Jay Ritter, an IPO expert at the University of Florida: The “Elon Musk effect” will lead to high volatility. At today’s overvalued levels, there is a substantial downside risk, because the dual-class share structure grants Musk extremely high control, and capital may be prioritized for long-term projects such as Mars rather than direct shareholder returns. After the market opens, the stock may face adjustments, and investors need to watch out for governance and capital allocation risks.

Daniel Newma, CEO of Future Group, a technology analysis firm: If investors take a 5-year perspective, SpaceX will perform exceptionally well. The $135 pricing may look expensive after one year, but after five years it will seem cheap. Daniel plans to buy modestly on the opening day to hedge against potential errors in short-term judgment, but expects better entry opportunities within the first 12 months. He is highly optimistic about long-term growth in Starlink and AI.

Dan Ives, analyst at Wedbush Securities in Los Angeles: The SpaceX IPO is a “watershed” event for the market, and overall he is optimistic. He believes there is an extremely high likelihood that it will merge with Tesla by 2027, with a probability of over 80%. Dan believes that after the opening, the stock could benefit from long-term narratives around AI and the space ecosystem, with strong demand from both retail and institutional investors—making its performance worth watching.