A recent Morgan Stanley study has suggested that the privately owned aerospace company SpaceX, which was founded by Elon Musk, could reach a value of $120 billion. This would make SpaceX worth triple what Musk’s electric car company’s value and larger than other aerospace companies like Northrop Grumman, Lockheed Martin, and Raytheon, which are currently worth $64 billion, $112 billion, and $56 billion respectively.
The report, named “SpaceX, Starlink and Tesla: Moving into Orbit”, details the potential for massive profits, and the disruption of the entire internet industry with SpaceX’s planned constellation of 12,000 satellites, dubbed Starlink. Musk’s goal is to cover the entire earth with high-speed, low latency, and affordable internet access, which is set to replace older and more expensive spacecraft that are settled over 22,000 miles away from the planet. Starlink’s satellites would rest only 1,000 miles away from earth, improving coverage and bandwidth while also providing an enhanced connection. The deployment would also give SpaceX six times the number of all operational spacecraft in orbit.
Back in May, SpaceX successfully launched 60 experimental Starlink satellites, which earned the company a valuation of $33.3 billion according to CNBC.
“This assumes that expanding access to the internet drives broadband penetration from 50% to 75% of the global population, with SpaceX able to capture ~10% of the incremental broadband subscribers,” the analysts wrote. Morgan Stanley has given the company a value of $120 billion assuming that the business is able to take a greater share of the incremental broadband subscribers. Although, the analysts base valuation of $52 billion would still be larger than Tesla’s $43.6 billion.
Government documents indicate that Starlink may reach up to 12,000 satellites by the end of 2027, SpaceX has their own plans to have a robust network up and operational in the next couple of years.
Back in May, Musk had indicated that Starlink could net between $30 to $50 billion in annual revenue once it is fully operational and if it succeeds in capturing a small percentage of the global telecommunications market. Musk also noted that this feat would cost SpaceX $10 billion or more a year, while also stating that Starlink would have partial coverage at 400 satellites and would be economically viable at 1,000 satellites.
“I think within a year and a half, maybe two years — if things go well — SpaceX will probably have more satellites in orbit than all other satellites combined,” he added.
As far as competitors go that are also in the process of launching their own global satellite internet constellation, SpaceX is up against OneWeb and Amazon’s Project Kuiper. Musk has also said that SpaceX, which is now owned by private investors, will ultimately go public. This move may happen sooner than many think due to the company’s surging valuation. Morgan Stanley analysts also pointed out that investors may be under appreciating the value of Tesla and SpaceX’s strategic relationship.
The report also included a wide margin of error. This means if the company completely fails at its Starlink mission and remains a satellite launching business then it will only be worth $5 billion.