By SpaceX, renowned for its pioneering work in aerospace and defense, has become one of the most sought-after companies among investors. While investing in Elon Musk’s space venture might seem challenging, there is an alternative option for those interested.
In a recent development, leading UK money manager Baillie Gifford disclosed that it has increased the value of its SpaceX stake held in the Baillie Gifford U.S. Growth Trust by 12% during its fiscal year, which ended in May 2023.
Baillie Gifford has yet to comment on this valuation adjustment, although it doesn’t come as a surprise to investors. SpaceX’s value is periodically updated through stock sales and transactions involving privately held shares. The latest assessment, conducted in July, pegged the company’s worth at a staggering $150 billion.
This revised valuation serves as a reminder that investors can indeed gain exposure to the privately held space enterprise. SpaceX holds the top position in Baillie Gifford’s U.S. Growth Trust, a diversified fund that encompasses both public and private companies. Noteworthy holdings include Tesla (TSLA), Nvidia (NVDA), Amazon.com (AMZN), as well as privately held companies like financial-tech firm Stripe and drone manufacturer Zipline.
There are some caveats, however. Most individual U.S. investors are barred from purchasing foreign mutual funds that are not registered with the Securities and Exchange Commission (SEC). Unfortunately, the U.S. Growth Trust falls into this category. Furthermore, SpaceX only represents a modest 6% of the total portfolio, making this investment more of a diverse play rather than a pure bet on space or SpaceX alone.
Alternatively, investors do have the option to buy SpaceX stock on specialized exchanges that specialize in privately held companies. However, such transactions typically require participants to possess a certain level of sophistication or financial means.
While the path to investing in SpaceX may not be without obstacles, the potential rewards make it an opportunity that shouldn’t be overlooked. As the space industry continues to soar to new heights, acquiring a stake in this ground-breaking company could prove extremely lucrative for those with the vision and resources to participate.
Rocket Lab USA: A Mini-SpaceX with Promising Potential
Rocket Lab USA (RKLB) offers investors an appealing opportunity for space exposure. Similar to SpaceX, it has a thriving space-launch business and a satellite-services business. However, the scale and valuation of the two companies differ significantly.
Rocket Lab is projected to launch approximately 15 rockets in 2023, while SpaceX aims to launch a staggering 80 rockets. Moreover, SpaceX rockets are considerably larger than those of Rocket Lab. These distinctions highlight the vastness of SpaceX’s operations compared to Rocket Lab’s.
When it comes to valuation, SpaceX surpasses even Boeing (BA) in terms of stock value. SpaceX is currently valued at an impressive figure, while Rocket Lab boasts a market value of about $3.1 billion. This valuation reflects around 10 times the estimated sales for 2023. In contrast, SpaceX trades at approximately 19 times its projected 2023 sales.
Although there are no guarantees that Rocket Lab will bridge this valuation gap, it has gained favor on Wall Street. An overwhelming 80% of analysts covering Rocket Lab shares consistently rate them a “Buy.” This percentage exceeds the average Buy-rating ratio for stocks in the S&P 500, which stands at around 55%. Furthermore, analysts have set an average price target of approximately $10 per share—$3.50 higher than its Wednesday closing price.
In May, underscore(s) expressed optimism about Rocket Lab, and since then, the stock has surged by a remarkable 57%. While the company continues to expand its business successfully, the market rally in startup companies has also played a role in this growth.
As of Thursday morning, Rocket Lab stock has experienced a modest uptick of 0.6% in trading. In comparison, the S&P 500 and Nasdaq Composite have recorded gains of 0.3% and 0.6% respectively.
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