Earnings preview: SpaceX

SpaceX will report its first earnings report since its June IPO later this evening, at approx.  2130 BST. This report comes at an important time, the share price crashed and burned in recent weeks, it is down 50% from its peak and is trading below its IPO price. Unsurprisingly, investors are jittery leading up to this report as it may determine the long term direction for the stock.

Numbers to watch

As this is the first earnings report from SpaceX, it is difficult to know what to expect. Analysts are predicting the company will report revenues of $6.93bn and earnings per share of $0.26. SpaceX is made up of three main businesses. Its space revenue is expected to come in at $835mn for Q2, connectivity revenues are expected to come in at $3.38bn, and its AI business is expected to generate $2.18bn.

We already know that SpaceX is loss-making, the company lost $4.3bn in Q1, after reporting a $4.9bn loss in 2025. Thus, reporting another loss would not be a shock to the market. Instead, the market will want to see what the company capex spend is, can it afford Elon Musk’s hopes to send data centres into space? What are the supply chain disruptions, and will it make a decent return down the line? 

Upside risks for capex

In Q1 capex spend was $10.1bn, with $7.7bn linked to AI. Analysts expect capex to grow to $13.2bn for last quarter. This will be a key metric to watch. SpaceX said in its IPO prospectus that it would prioritize growth and investment to capture significant opportunities in AI and compute infrastructure. Due to this, we think that the risks are to the upside for capex. If they are significantly higher than expectations, we could see the stock price take another lurch lower, as a high capex number could lead to fears about the cash burn rate.

Last year, Starlink was SpaceX’s most profitable business, generating more than $11bn in sales, which was 61% of the total. It also generated $4.42bn of income. In June, the company rose Starlink subscriber prices, while this may be too late to have an impact on Q2 earnings, it could impact future earnings, although SpaceX may not provide future earnings guidance in its first earnings report.

Why a SpaceX and Tesla merger would be a bad idea

Investors will also be watching to see if Musk plans to merge Tesla with SpaceX. If Musk does suggest that this is possible, the market may not think it is wise to have two companies merge with negative cash flow and high large spending plans.

Another looming risk for the SpaceX share price

Earnings are not the only big event for the SpaceX share price this week. On 6^th August, a  lock up period for SpaceX shares will expire, which could more than double the tradable float of SpaceX shares. Thus, tonight’s numbers may not be the biggest driver for SpaceX shares.

Strong earnings could become a good exit point for those who have owned pre-IPO SpaceX shares and can finally sell them. However, bad earnings and a doubled float size could add a double whammy of downside pressure to the share price later this week.

The stock price impact

The fact that the enhanced share float size comes so soon after the earnings report, could make a bullish path hard to find for SpaceX in the coming days. Added to this, traders have rushed to sell SpaceX shares in recent weeks, and 34% of the original float is currently sold short, the equivalent of $23.6bn.

There is an uncomfortable fundamental backdrop to this earnings report. However, from a technical perspective, the $110 level is key support. This is also the level that Elon Musk said represents a massive bargain for the stock.

Ater closing last week below $110, the stock has jumped above this level and is higher by 1.37% this week. However, it is still 22% below its IPO price. 

Momentum indicators are still to the downside for SpaceX, and the stock price remains below key moving averages. This is at odds with the overall market, which has embarked on a powerful rally in recent days and has marked the end of the sell off in tech stocks, which started on 22^nd June.

Key resistance to watch include $123, which is the first major hurdle for any rebound.

SpaceX

Source: XTB