Forget SpaceX at $200. Buy This Space ETF Instead for Just $34.
Written by Scott Levine for The Motley Fool -> SpaceX recently completed its highly anticipated IPO. Shares of SpaceX have soared since the IPO. Conservative investors may prefer an ETF that provides comprehensive exposure to the space industry with lower risk. Now that the h
Conservative investors may prefer an ETF that provides comprehensive exposure to the space industry with lower risk.
Now that the highly anticipated initial public offering (IPO) of Space Exploration Technologies (NASDAQ: SPCX) is in the rearview mirror, Main Street investors can shoot for the moon with one of the burgeoning space industry's rising stars.
But even though the market has demonstrated a voracious hunger for SpaceX stock, many are hesitant to click the buy button after it has soared so high since its IPO. Luckily, space investors need not despair, as there's a space-themed exchange-traded fund (ETF) that offers exposure to SpaceX and other leaders in the space economy.
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While most people are still operating on terra firma, the space economy is in full swing and expected to grow further in the coming years. Research from business intelligence firm Global Market Insights projects that the global space economy market was valued at $439.1 billion last year and is forecast to reach $462.4 billion in 2026, expanding to $851.8 billion in 2035.
In these early innings of the space economy's growth, SpaceX has emerged as a force to be reckoned with. The company has distinguished itself in several ways. From its 2008 achievement of becoming the first private company to successfully launch a liquid-fueled rocket to Earth's orbit to its 2012 success of becoming the first private company to dock a private spacecraft with the International Space Station.
Pricing its IPO at $135, SpaceX saw its stock shoot sharply higher on its first day of trading. After rising to an intraday high of $176.52, SpaceX stock closed at $160.95. The bullish sentiment surrounding SpaceX stock carried over into the stock's second day of trading, when it closed almost 20% higher at $192.50.
Because SpaceX isn't profitable, the traditional price-to-earnings ratio doesn't provide much insight into the stock's valuation. Instead, we can look to the price-to-sales (P/S) ratio. In doing so, we find that SpaceX stock is trading at a steep P/S ratio of 130 based on trailing sales.
