SpaceX stock faces first earnings but Jefferies says investors blame the wrong risk

SpaceX NASDAQ:SPCX will report its first quarterly results as a public company on Tuesday, and investors are looking at it as a test of whether Starlink’s profits can support Elon Musk’s expensive ambitions.

The shares have struggled since their June listing, while critics have focused on Musk’s control of more than 80% of voting rights and his roles as chief executive, chief technology officer and chairman.

Jefferies strategist Aniket Shah told Bloomberg that linking the recent weakness to governance was “a far stretch”.

That shifts attention towards an immediate risk: whether SpaceX can finance spending on artificial intelligence, Starship and orbital infrastructure without debt, losses and dilution overwhelming shareholders.

Jefferies says governance is not the immediate problem

Shah, Jefferies’ global head of sustainability and transition strategy, questioned investment rules that automatically reject concentrated ownership, dual-class shares or combined chairman and chief executive roles.

He is not the bank’s SpaceX equity analyst, and his remarks were not an earnings forecast or formal recommendation.

His argument does not erase governance risk. Musk’s voting power gives outside shareholders limited influence, while critics are concerned about board independence, shareholder protections and potential conflicts involving his other companies.

The distinction is timing as those features were visible before SpaceX listed on June 12.

Shah argued that the stock’s recent performance had little to do with governance and may instead reflect investors reassessing their assumptions about AI.

Tuesday’s report will test that explanation. SpaceX must show that its established businesses can generate enough profit to fund projects whose commercial returns remain uncertain.

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Starlink must prove it can bankroll the moonshots

Visible Alpha consensus expects second-quarter revenue of $6.9 billion, led by the Connectivity division.

The unit, which includes Starlink, is forecast to deliver a 35.9% operating margin, offsetting losses across Space and AI, according to S&P Global Market Intelligence.

The range of earnings estimates remains wide, stretching from a loss of $1.26 a share to a profit of 33 cents. That reflects uncertainty about the timing and classification of development expenses.

Starlink subscriber growth, Connectivity margins and spending guidance will therefore matter more than a single earnings-per-share figure.

Investors will also seek updates on Starship, AI data centres and the timetable for turning those investments into revenue.

S&P Global’s Melissa Otto highlighted capital investment as a concern.

Consensus projections show annual capital expenditure rising from $48.7 billion in 2026 to $118.4 billion in 2028, while debt could climb from $41.7 billion to more than $218 billion.

Valuation and share supply could eclipse strong results

Morgan Stanley analyst Adam Jonas remains bullish, with a $300 target.

The bank said shares below $120 offered a reasonable valuation for Space and Connectivity while assigning limited value to the AI opportunity.

Morningstar takes a different view. Analyst Nicolas Owens values SpaceX at $63 a share, arguing that the market price relies heavily on optimistic outcomes for Starship, satellite connectivity and orbital computing that remain unproven.

Supply may provide another obstacle. The first earnings-linked lock-up expiration arrives on August 6, when up to 911.5 million shares could become eligible for sale.

Morningstar says staggered releases could eventually place more than 6.4 billion additional shares on the market, although eligibility does not guarantee selling.

SpaceX will publish results after Tuesday’s market close and hold its webcast at 4.30PM ET.