Analysts at Morgan Stanley have doubled their valuation of Elon Musk’s SpaceX.

Analysts at Morgan Stanley (NYSE: MS) on Thursday doubled their estimated value of SpaceX, Elon Musk’s startup focused on launch rockets, satellite broadband, and (in the future) point-to-point space travel. Significant events since the last evaluation in July led the analysts to revise their long term estimate to $100 billion. (CNBC)

Rapid progress

Since July, SpaceX has apparently been on a roll and notched up several achievements:

• Won hundreds of millions of dollars worth of contracts from the Pentagon
• Launched hundreds of Starlink satellites into orbit for its satellite broadband project
• Conducted two test flights of its Starship rocket
• Carried NASA astronauts on a test flight into space
• A funding round that commenced in August valued the company at $44 billion

Citing the above milestones, Morgan Stanley analyst Adam Jones remarked: “SpaceX continues to solidify its place as ‘mission control’ for the emerging space economy.”

SpaceX businesses in a virtuous circle

“The pieces are coming together for SpaceX to create an economic and technological flywheel,” Jonas observed.

Jonas said SpaceX was applying its launch cost advantage to hasten the deployment of the Low Earth Orbit (LEO) satellite broadband network. The startup is likely to dominate the satellite broadband sector and its success would attract large capital inflows at competitive rates. This cash could then circle back into the launch business and help to “develop even more capable launch architectures (Starship) that further deepens and widens the moat in satellite launch costs.”

Changes in valuation assumptions

The analysts have revised their estimated valuation of SpaceX due to “changes in our underlying assumptions in the Launch and Starlink units.”

SpaceX would use its Starship rocket to launch hundreds of satellites in one go. These rockets would also play a vital role in the launch market and generate $67 million per launch with an operating profit of 20% in a couple of decades.

Starship is a reusable rocket that can launch large-mass cargo and up to 100 people on space missions. According to Jonas, it would cost SpaceX roughly between $5.6 billion and $8 billion to fully develop Starship.

Meanwhile, rapid progress towards commercial service on Starlink called for an upward revision of its valuation.

Valuation estimates

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