There were fears earlier this month that shares of Space Exploration Technologies Corp (NASDAQ: SPCX), also known as SpaceX, would go over a cliff after it reported its earnings and its first lockup expired. And yet, that didn't happen. Instead, the stock has been rallying since then, reversing some of the losses it experienced in recent weeks.
Now it's back above its IPO price of $135, trading around $140. Growth investors have had second and maybe third or fourth thoughts about the stock and appear willing to buy it despite its rich valuation of nearly $1.9 trillion. Could SpaceX's rally continue, and could it end up getting back to $200?
This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.
Continue » Growth investors may have been willing to look past SpaceX's valuation because the business is growing so significantly, on so many different fronts. Here's a snapshot of its growth for the June quarter, compared to a year ago. The values are in millions.
From a growth perspective, there's a lot to like here, as SpaceX is not only growing at a high rate but also doing so across multiple segments; its growth isn't tied to just one area. Its space business is its smallest, but it may still have tremendous room to rise higher, especially with SpaceX looking to one day send people to Mars. Its ambitions are grand, and while it has a long way to go, growth investors may nonetheless be encouraged with what they are seeing thus far.
SpaceX also shrunk its operating losses last quarter to $143 million, down from $970 million a year ago. Meanwhile, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $3.5 billion, which was nearly triple the $1.2 billion it reported in the prior-year period. SpaceX hit $200 in its early trading days after its IPO, when demand for the stock was tremendous.
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