Space stocks tumble ahead of SpaceX IPO, valuations in focus

Shares of several space-related companies fell sharply this week as investors realized gains ahead of SpaceX’s planned initial public offering. Virgin Galactic closed at $4.25, its lowest level since May 28. Intuitive Machines shares dropped roughly 30% from their peak last week. Rocket Lab slipped to about $114 from a year-to-date high near $151. The Tema Space Innovators ETF (ticker: NASA) declined to $35.20 from $42.75.

Traders and market participants said the approaching SpaceX IPO was a key factor in the selloff. SpaceX is expected to seek roughly $75 billion in proceeds at a valuation near $1.75 trillion, down from an earlier $2 trillion figure. Analysts at Morningstar estimated the company’s fair value could be about 50% below the earlier expectation, increasing uncertainty around the debut.

Individual names moved sharply after recent rapid gains. Virgin Galactic fell more than 53% from its high last week. Intuitive Machines retraced about 30% from its peak, and Rocket Lab pulled back from its recent top. Market observers described the moves as profit-taking following large short-term advances.

Valuation measures drew attention as market caps surged during the rally. At peak levels, Rocket Lab’s market value approached $90 billion and Intuitive Machines exceeded $10 billion. Rocket Lab’s forward price-to-sales ratio was around 72.9, while Intuitive Machines was near 13. Other publicly traded space companies also showed elevated multiples relative to current revenue and profitability.

Recent price histories show large prior gains: Rocket Lab rose approximately 485% from its low last year, Intuitive Machines gained about 470% over the same period, and Virgin Galactic climbed roughly 313% from its trough earlier this year. Market participants noted heavy profit-taking can follow such steep rallies.

Analysts covering the sector urged caution on new long positions. The average analyst price target for Rocket Lab stood near $97, about 16% below recent trading levels. Some analysts highlighted that several recent large IPOs and listings have experienced weaker price performance after debuting.

Investors and traders said the combination of a high-profile IPO, a reduced valuation estimate for SpaceX and stretched metrics at several public space firms contributed to the selloff and the short-term shift in market sentiment.