SpaceX Starship Could Transform Investor Expectations


The 20 spaceship prototype is stacked on Super Heavy Booster 4 on August 6, 2021.


Elon Musk’s SpaceX has become one of the world’s most valuable private companies, and Morgan Stanley believes the Starship rockets the company is developing will have far-reaching implications.

Starship is the massive next-generation rocket that SpaceX is developing to be fully reusable, to launch cargo and people on missions to the Moon and Mars. The company tests prototypes at a facility in South Texas and has performed several short test flights.

“This technological development has the potential to transform the expectations of investors in the space industry,” Morgan Stanley analyst Adam Jonas wrote in a note to investors on Monday.

“As one client put it, ‘talking about space before Starship is like talking about the Internet before Google,'” added Jonas.

Morgan Stanley noted that his latest views on SpaceX came in response to CNBC’s announcement that the company’s valuation had reached $ 100 billion.

“What SpaceX is doing on the shores of South Texas calls into question any preconceptions of what was possible and the possible timeframe, in terms of rockets, launchers and supporting infrastructure,” Jonas said.

In Morgan Stanley’s view, Musk’s company has created a “dual flywheel” of technological development with its reusable rockets and Starlink satellites. The company bases the majority of SpaceX’s assessment on the earning potential of the Starlink satellite internet network, which Musk says could generate as much as $ 30 billion in revenue per year.

“We consider SpaceX and Starlink’s launch capabilities to be inextricably linked, so improvements in launch capability / bandwidth (both frequency and payload per flight) and cost of launch improve the economy and evolutionary path of Starlink’s LEO constellation, ”said Jonas. At the same time, the development of Starlink’s business opportunity provides a thriving ‘captive customer’ for the launch business, enabling symbiotic development. “

Notably, Morgan Stanley expects Starlink to burn around $ 33 billion this decade and generate positive cash flow in 2031.

Last year, Morgan Stanley predicted SpaceX would grow into a $ 100 billion company – at a time when SpaceX’s valuation was approaching $ 44 billion.

“More than one client has told us that if Elon Musk becomes the first trillionaire … it wouldn’t be because of Tesla. Others have said SpaceX could possibly be the world’s most beloved company – in all. sectors, ”says Jonas.

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