Tesla Analyst Values SpaceX At $50B, With Starlink The Biggest Growth Driver

Elizabeth Balboa

Tesla Inc's (NASDAQ: TSLA) sister company, SpaceX, carried its first astronauts into orbit last week, making history for the private space industry.

Achievements such as this have helped CEO Elon Musk attract investments for ambitious projects. SpaceX’s recent $125 million funding round brought the company to a $36 billion valuation, according to CNBC. Morgan Stanley cites a valuation closer to $50 billion.

Starlink Success

The analysts suspect SpaceX’s value lies largely in Starlink, the company’s low-latency broadband internet system.

“We are modeling for $10 billion to $15 billion from 2020-2025 for Starlink, with the potential for more from ground terminals, 30,000 additional satellites and replacement of satellites, and expenditures associated with Starship/hypersonic point-to-point transport and Mars/deep space exploration,” analysts Armintas Sinkevicius, Adam Jonas, Simon Flannery and Matthew Sharpe wrote in a note.

In a best-case scenario, with the broadband internet taking off, SpaceX could achieve a $120 billion valuation. If the project fails entirely and SpaceX remains a satellite launcher, valuation could drop to $5 billion.

Starship Support

Morgan Stanley also sees potential in SpaceX’s Starship, “which can accelerate the deployment of the Starlink network, and unlock opportunities around hypersonic point-to-point transportation and deep space exploration,” the analysts wrote.

The company’s first Starship technology to pass the cryogenic tanking test failed to withstand a static fire test last week, but SpaceX has already begun construction on a new prototype. President and COO Gwynne Shotwell has forecasted successful Starship flights by 2026.

Related Links:

SpaceX Falcon 9 Launch A 'Major Shot In The Arm' For Tesla Brand, Analyst Says

Tesla's Stock And SpaceX Launches: Are Traders Looking For A Connection?

Latest Ratings for TSLA

Date Firm Action From To
May 2020 Daiwa Capital Initiates Coverage On Outperform
May 2020 Wedbush Maintains Neutral
May 2020 JMP Securities Maintains Market Outperform

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.