The valuation of billionaire Elon Musk’s space exploration venture, SpaceX, is growing rapidly with each successfully deployed spaceship and satellite in orbit. At the same time, Musk’s electric vehicle (EV) brainchild, Tesla (NASDAQ:TSLA), is facing a slew of ratings downgrades from Wall Street analysts, which are dragging down its stock.
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SpaceX to Raise $750M in a Fresh Funding Round
The latest reports by Bloomberg and the Wall Street Journal state that the company is eyeing a valuation of $150 billion in its most recent funding round. The company is planning to raise $750 million by allowing current and former SpaceX employees to sell their shares at a price of roughly $80 apiece.
In May 2022, the company was valued at $127 billion, and a recent January funding round valued the Space Exploration Technologies company at $137 billion. The current jump in valuation from $137 billion to $150 billion has taken place in a relatively short span. During this span, SpaceX’s satellite center, Starlink, has rapidly grown its high-speed satellite internet network, having more than 1.5 million customers worldwide as of May 2023. While Musk’s commercial space travel mission is growing steadily with a few hiccups, private investors in the company believe Starlink has turned out to be the golden goose. In April this year, SpaceX’s gigantic rocket, Starship, exploded in its debut flight test due to an anomaly before the stage separation.
Tesla Stock Drops on Further Downgrade
On June 25, Goldman Sachs analyst Mark Delaney downgraded TSLA stock to a Hold rating from Buy while raising the price target. However, the revised price target of $248 (previously $185) still represents a 3.4% downside potential from current levels.
The five-star analyst is highly optimistic about TSLA’s long-term prospects and “competitive positioning” thanks to its software developments in the automotive space. Having said that, he believes the EV maker’s margins could be pressurized due to the tough pricing environment. Delaney’s downgrade follows three other downgrades in the past week. Notably, TSLA stock lost 6.7% in the past five trading days following these downgrades, while it has gained 137.4% year-to-date.
Is TSLA Stock a Buy, Hold, or Sell?
Analysts are excited that Tesla’s supercharger network is attracting EV makers from around the globe, hailing the company as one of the beneficiaries of the artificial intelligence (AI) boom, but remain concerned about its current stock rally. On TipRanks, Tesla has a Moderate Buy consensus rating based on 13 Buys, 13 Holds, and five Sell ratings. Also, the average Tesla price target of $218.88 implies 14.7% downside potential from current levels.
