Space Exploration Technologies (NASDAQ: SPCX) (SpaceX) debuted on the stock market on June 12 as the largest initial public offering (IPO) in history, and after its one week, it was the world’s sixth-most-valuable company, with a market cap of just over $2.43 trillion. Despite the hype surrounding SpaceX and its initial pop, there’s one reason I wouldn’t touch the stock right now: it’s too expensive and therefore too susceptible to a sudden pullback.
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A company’s price-to-sales (P/S) ratio tells you how much you’re paying for every dollar of its revenue. The higher the P/S ratio, the more expensive a stock is considered. Using SpaceX‘s June 18 market cap and its $18.67 billion in 2025 revenue, its P/S ratio was be 130.2, which is extremely expensive.
For perspective on how expensive that is: It’s 36.5 times higher than Amazon, 6.4 times higher than Nvidia, and 9 times higher than Elon Musk’s other company, Tesla.
Being expensive doesn’t always mean being a bad investment. Sometimes, premium companies command a premium price. But at its valuation after one week of trading, there’s a lot of hype and speculation baked into SpaceX’s stock, all while it’s unprofitable (it lost $4.94 billion in 2025) and built on visionary promises.
SpaceX is capable of growing into its valuation, but as it stands, it’s priced for perfection and will likely be highly volatile over the next couple of years. On Monday, the stock fell 16%, and SpaceX will likely continue experiencing ups and downs. It’s a stock I’d rather access via an ETF than own directly to reduce risk.
Should you buy stock in Space Exploration Technologies right now?
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $417,305!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,293,148!*
