SpaceX stock rises ahead of earnings: what are options and technicals signaling?

SpaceX stock will be in focus later today as the company reports its first earnings since going public. Shares rose to $114.45 on Monday, recovering modestly from their record low of $104. Investors are now watching closely to see whether the inaugural earnings report will provide the catalyst for the stock to extend its rebound or resume its decline.

SpaceX earnings to provide color on its growth and profits

Elon Musk’s Space Exploration Technologies will be in the spotlight as the company publishes its financial results, which will provide color on its business.

These will be important numbers because they are the first ones since the company launched its highly successful initial public offering (IPO). 

Additionally, the company will likely have a chance to explain whether it is planning to merge with Tesla. As we reported last week, Tesla is considering selling its Chinese operations to make a potential deal easier. 

The most recent results, filed its S1 document, showed that its revenue jumped to over $4.6 billion in the first quarter, while its net loss jumped to over $4 billion. It also continued boosting its capital expenditure because of its vast AI ambitions, especially after its merger with xAI.

Yahoo Finance data expects the company’s revenue to come in at $6.9 billion, with the net loss narrowing to $1.9 billion. 

Still, on the positive side, the company’s future revenue growth is expected to continue soaring in the long-term. For example, the annual revenue is expected to jump to $39 billion this year and $73 billion next year. 

This growth is driven by the ongoing AI boom that has made Grok a large player in the industry. Additionally, the company has inked major deals with companies like Anthropic, Reflection AI, and Alphabet. 

Anthropic is paying it over $1 billion a month, while Reflection will be paying it over $900 million. Alphabet, on the other hand, is expected to pay it $950 million a month, and more hyperscalers may come in. 

Analysts are bullish on the SPCX stock

Top analysts are highly bullish on the SPCX stock. For example, Royal Bank of Canada (RBC) recently hiked its rating to outperform with a price target of $225, while Raymond James reiterated its strong buy rating. Needham boosted the target to $250, with the most optimistic analyst having a target of $800. 

The options market is also signaling that the stock may rebound, with more investors having calls than puts. It has a put/call ratio of just 0.30. However, the implied volatility of 207% is much higher than the historical volatility of 75%.

SpaceX share price technical analysis

SPCX stock chart | Source: TradingView

The two-hour chart shows that the SPCX stock has formed a double-bottom pattern at $106 and a neckline at $118.5. It has also moved above the upper side of the descending channel, while the Relative Strength Index (RSI) has pointed upwards.

Therefore, the most likely scenario is where the stock jumps by double digits after its earnings. If this happens, it may jump to $130 and above. However, because of the significant implied volatility, the stock may also resume the downtrend, and possibly move below $100.