SpaceX Is Now Worth More Than Boeing and Raytheon

Elon Musk’s space company that pioneered reusable rockets is still privately held, but SpaceX still has shares that can be traded with sales arranged by the company or on third-party platforms such as Rainmaker Securities.

The $150 billion valuation is about a $10 billion bump from its prior valuation. That change moves SpaceX over

Raytheon Technologies

(ticker: RTX) as the aerospace and defense franchise with the largest market capitalization.

Market cap is one way to assess value. Enterprise value, which includes things such as debt and cash, is another. By that metric, SpaceX sits in third place behind

Boeing

(BA) and Raytheon.

Sales is another way to measure size. By that metric, several of the largest aerospace and defense companies in the world are state-owned Chinese firms such as the Aviation Industry Corporation of China which generated an estimated $80 billion in 2021 sales, including an estimated $30 billion in sales to the defense sector.

SpaceX sales are a bit of a mystery. The company launches rockets essentially every week. Some generate revenue from third parties, some take SpaceX Starlink satellites into orbit.

Starlink is SpaceX’s space-based Wi-Fi service that is responsible for the majority of the company’s $150 billion valuation. Starlink ended 2022 with about 1 million subscribers and should end 2023 with roughly 2 million subscribers based on recent growth rates. Ending the year with 2 million subscribers would put 2023 sales at roughly $2.5 billion to $3 billion.

Investors might get a chance to see SpaceX and Starlink financials when the company needs to raise more money. Elon Musk has hinted that Starlink could raise money in an initial public offering when the Wi-Fi service has achieved or is close to achieving, profitability.

External capital will likely be needed to continue to build out the Starlink service. There are roughly 4,400 working Starlink satellite in orbit today. Current plans have that number going to 7,500, but SpaceX likely won’t stop there. Building out the satellite constellation will end up costing billions of dollars.

To support a $150 billion valuation, SpaceX will eventually have to generate billions in annual profits. Raytheon is expected to generate roughly $8.3 billion in net income and $6.5 billion in free cash flow in 2024.

SpaceX is the premier space company. Boeing,

Lockheed Martin

(LMT),

Northrop Grumman

(NOC), and others have space businesses, but it’s unlikely the stocks will get a bump from SpaceX’s new valuation mark. Boeing stock is down a little in premarket trading Friday. Lockheed stock is flat and Northrop stock is up a little.

S&P 500
and

Dow Jones Industrial Average
futures are up 0.1% and 0.4%, respectively.

Write to Al Root at [email protected]