Analyst sends strong signal on SpaceX stock before earnings

SpaceX (SPCX) is to report second quarter earnings on August 4, offering investors their first look at how it might justify its nosebleed valuation.

Ahead of the report, shareholders are bracing for another Big Tech-style quarter, marred by heavy spending, uncertain cash flow, and a looming increase in tradable shares. 

Those concerns have pushed SpaceX stock sharply below its June peak and even below its $135 IPO price.

The selling pressure stands, but according to TheFly, Cantor Fitzgerald's top analyst, Colin Canfield, remains firmly bullish, and at the center of it is SpaceX's upcoming earnings report.

Earnings now becomes a major test of whether Elon Musk's space business can generate enough financial firepower to sustain his broader ambitions. 

Cantor's thesis is built around a flywheel 

Canfield just doubled down on SpaceX stock ahead of the pivotal Q2 earnings report, maintaining a $246 price target. 

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At SpaceX's latest price of $108.37, Canfield's target implies roughly 127% upside.

Canfield argues that SpaceX is unlike a typical aerospace business because it controls more of its economic chain than almost any competitor. 

Falcon and Starship can deploy Starlink satellites at an internally controlled cost. Starlink can generate subscription sales by offering communications infrastructure. The AI operation can utilize that network, SpaceX's computing capacity, and the X platform to distribute and monetize services. 

So, in effect, each layer makes the others more valuable. 

Their integration offers unusually robust economics, but it also creates an analytical issue for investors.

For years, Tesla (TSLA) investors have struggled to assign separate values to its business segments, even as the company has remained primarily an EV maker. SpaceX investors are likely to face the same valuation conundrum. 

So a profitable Starlink business might subsidize years of losses in Starship or AI, inflating consolidated revenue growth to look much healthier than underlying cash generation.

That's why SpaceX's first public company results matter a ton, because they could show investors where the profits, losses, and capital requirements actually sit.

What Canfield says earnings need to resolve 

Canfield identified three primary issues that SpaceX's earnings report could answer.

• Is the AI computing business profitable?

• How does SpaceX intend to finance its enormous capital spending?

• Can SpaceX move beyond the technical and selling pressure surrounding its post-IPO lock-up period?