SpaceX just took Palantir's top spot with one of the most excessive valuation multiples in megacap tech

Step aside, Palantir (PLTR), there's a caller valuation aggregate king successful the megacap tech banal town: SpaceX (SPCX).

The insight: With its scorching-hot debut connected nationalist markets present successful the books, SpaceX is trading connected a trailing 12-month price-to-sales ratio of 110 times, compared to 63 times for Palantir, which has agelong been viewed arsenic the astir richly valued megacap tech play successful the game.

For position connected however optimistic investors are astir SpaceX, the price-to-sales ratio for the S&P 500 (^GSPC) is 3.5 times. Even AI darling Nvidia (NVDA) clocks successful with a ratio of 20 times.

The price-to-sales ratio is simply a valuation metric calculated by dividing a company's marketplace capitalization (or stock price) by its full revenue. It shows however overmuch investors are consenting to wage for each dollar of sales.

As a wide regularisation of thumb, a price-to-sales ratio beneath 2 is often considered charismatic oregon perchance undervalued. But the metric varies by manufacture — high-growth tech oregon bundle companies often commercialized astatine overmuch higher multiples (5x-10x oregon more) owed to expected beardown aboriginal growth.

SpaceX besides trades astatine a 2x premium to Palantir connected a trailing price-to-book ratio basis.

Quick analysis: The Elon Musk-led rocket institution SpaceX officially priced its banal astatine $135 connected June 11, offering 555.6 cardinal shares. The pricing valued SpaceX astatine $1.78 trillion.

SpaceX made its historical nationalist debut connected the Nasdaq connected June 12, erstwhile the banal officially opened for trading astir midday astatine $150 per share.

Driven by dense request from some organization and retail investors, the banal steadily climbed passim the league earlier closing its archetypal time astatine $160.95.

This palmy 19.2% summation from its archetypal offering terms instantly catapulted SpaceX to a monolithic $2.1 trillion marketplace capitalization, according to Yahoo Finance AlphaSpace.

SpaceX banal roseate different 10% to $178 connected Monday successful its 2nd time of trading.

Bottom line: At SpaceX's existent price-to-sales ratio, investors are betting Elon Musk hits each his goals for the institution successful the coming years. That includes driving much income from Starlink, doing concern connected Mars, and winning larger pieces of the authorities declaration pie.

Early SpaceX capitalist Ron Baron said implicit the play that the institution could spell connected to go worthy "$10 trillion, $20 trillion oregon $30 trillion."

Whether Musk achieves this ngo — and drives the marketplace headdress toward Barron's bullish telephone — is anyone's guess. But we volition enactment that Palantir has managed to turn into its valuation amid strings of awesome top-line quarters since going nationalist successful 2020. The way has been chopped for SpaceX to bash the same.