SpaceX shares moved lower in premarket trading by over 11% on Wednesday despite a set of quarterly results that far exceeded consensus. In a client note, Piper Sandler framed the decline as a response to near-term structural factors tied to the companys stock float and future spending, not to weakness in the quarter.
Analyst Alexander Potter highlighted that SpaceX "easily beat consensus" on its first earnings call. The firm reported second-quarter revenue of about $7.8 billion, an increase of roughly 92% year over year, which was about $1 billion above market estimates. Adjusted EBITDA reached $3.5 billion, rising 191% year over year. The company also posted a gross margin of 55% and an EBITDA margin of 45%.
Management added an ambitious forward-looking target: the chief financial officer said SpaceX will attain a run-rate of at least $100 billion a year in recurring revenue by December, a projection that implies upside versus consensus forecasts.
Despite those strong metrics, Piper Sandler identified three drivers it believes explain the stock's premarket retreat:
- A projected increase of more than 140% in the number of tradable shares over time, which the firm said will expand the free float and create a valuation overhang.
- Fiscal 2027 capital expenditures that the firm expects to be around $65 billion - about $17 billion higher than previously anticipated - implying heftier near-term cash needs and investment intensity.
- The presence of lucrative but cancelable AI cloud contracts whose "staying power" is difficult to assess, leaving some uncertainty about the durability of related revenue streams.
Piper Sandler noted that presently less than 5% of SpaceXs total shares are freely tradable. That share of free float is forecast to rise to about 50% by June 2027, creating what the firm described as a "lockup expiration overhang" that may act as a headwind to valuation. The note warned that as the float grows, "the multiple may not correlate with fundamentals."
Although the firm increased its internal estimates to reflect current results, it reduced its target valuation multiple - cutting it to 12 times from 20 times 2031 EV/EBITDA. Piper Sandler said this lower multiple mirrors Tesla's all-time low and now serves as a more appropriate reference point given the after-hours action the firm observed.
The analysts' view places emphasis on supply-side and contract durability risks for investors weighing the stock, rather than signaling problems with reported quarterly performance.