Stone Fox Capital
Founder, CIO & Portfolio Manager of Stone Fox Capital
SpaceX, Rocket Lab and AST SpaceMobile all traded at irrational valuations, so a rerating lower was the only rational outcome. Another investor notes the sector was flushed right after its biggest catalyst, as investors dumped other space names to fund their SpaceX allocations. x.comÂ
SpaceX's competitive threat makes AST SpaceMobile less attractive at these levels than SpaceX and Rocket Lab. AST SpaceMobile's weekly chart shows a downtrend and strong outflows, though the stock is near marked support. x.comÂ
Rocket Lab and AST SpaceMobile are not buys because their sales multiples are too high, even after the selloff. Rocket Lab trades at 30x sales after a 14% drawdown, while AST SpaceMobile trades at 138x sales. x.comÂ
Investors rotating into cheaper stocks with more upside should ultimately benefit Rocket Lab and AST SpaceMobile. Both have already suffered major drawdowns. x.comÂ
Rocket Lab, AST SpaceMobile and Intuitive Machines are priced as if they had already colonized the solar system, so they look headed one way once the hype rally ends. Together they carry an $82 billion market cap on $883 million of revenue and no profits, while burning cash heavily. Reusable rockets are a cost-reduction story rather than a giant leap. Their long-term potential may be real, but that future is 20-30 years out and does not justify today's valuations. x.com x.com x.com x.com x.com … Show more
Rocket Lab still looks ridiculously expensive at 29 times forward sales against SpaceX at 22 times, even after a 65% fall. At 22 times, Rocket Lab would be roughly $38, and SpaceX would still be the pick. SpaceX also has better forward guidance; Rocket Lab's negative adjusted EBITDA makes sales multiples the valuation yardstick. x.com x.com x.com x.comÂ
Space stocks could regain high-beta flows as SpaceX lockups end and a probable late-November Anthropic IPO threatens AI stocks, much as SpaceX's IPO hurt space names. Hedge funds are overexposed to the Magnificent Seven and underexposed or max short low-quality high beta; falling rates and toppy oil could make the rotation painful for them through 2027. AST SpaceMobile could benefit as intermittent service triggers agreements and Blue Origin possibly returns to the pad in six weeks. x.com x.comÂ
Rocket Lab and SpaceX are the preferred space names as SpaceX is killing it right now, while AST SpaceMobile has only a very small chance of returning to its highs. x.comÂ
Rocket Lab, AST SpaceMobile, Firefly, Intuitive Machines, Redwire and SpaceX are too risky to buy at today's valuations, given the potential for a cascade decline. Index-inclusion buying may keep SpaceX and sympathy names bid for months, but in another growth bear market like 2021's aftermath they could fall hard and recover slowly even if the businesses execute, and SpaceX may eventually crash the party. They remain liked, just not worth adding; Northrop Grumman is the preferred space stock. … Show more
A stronger SpaceX could lift the wider space-stock basket, including AST SpaceMobile, Rocket Lab, Redwire, Planet Labs, Intuitive Machines, Firefly Aerospace and Voyager Technologies. Per DeItaone, JPMorgan raised its SpaceX price target from $240 to $500 while maintaining Overweight. The seven space stocks rose alongside SpaceX after hours. Their initial post-IPO selloff was followed by macro-driven weakness, not further weakness caused by SpaceX. x.com x.com x.comÂ
Space stocks have lost their catalyst now that SpaceX is public. For a year the basket was a bet on when the SpaceX IPO would happen; it listed Friday, up 19% at $2.1 trillion, the biggest IPO in history, and the air came out. Rocket Lab, AST SpaceMobile, Satellogic and BlackSky, green for months, have all flipped to SuperTrend downtrends. That is not the sector breaking but buy-the-rumor, sell-the-news. x.comÂ
