Morgan Stanley says SpaceX’s Starship could change investor expectations about space

Elon Musk’s SpaceX has grown into one of the most valuable privately held companies in the world, and Morgan Stanley believes the Starship missiles the company is developing will have far-reaching implications.

Starship is the next generation massive rocket SpaceX is developing to be fully reusable to launch cargo and people on missions to the moon and Mars. The company is testing prototypes at a facility in South Texas and has flown several short test flights.

“This technological development has the potential to change the expectations of investors in the space industry,” wrote Morgan Stanley analyst Adam Jonas in a statement to investors on Monday.

“As one customer put it, ‘Talking about space before Starship is like talking about the internet before Google,'” added Jonas.

Morgan Stanley noted that his latest views on SpaceX came in response to CNBC reports that the company’s valuation hit $ 100 billion.

“What SpaceX is doing on the South Texas coast challenges any preconceived notions about what is possible and the possible timeframe when it comes to rockets, launch vehicles and supporting infrastructure,” said Jonas.

According to Morgan Stanley, Musk’s company has created a “double flywheel” of technology development with its reusable rockets and Starlink satellites. The company bases the bulk of its valuation on SpaceX on the earnings potential of the Starlink satellite internet network, which Musk previously said could generate up to $ 30 billion in annual sales.

“We see the launch capabilities of SpaceX and Starlink as inextricably linked, which means that improvements in launch capacity / bandwidth (both frequency and payload per flight) and launch costs improve the economy and the way to scale Starlink’s LEO constellation,” said Jonas. “At the same time, unlocking Starlink’s commercial opportunities provides a thriving ‘own customer’ for the go-to-market business and enables symbiotic development.”

In particular, Morgan Stanley expects Starlink to burn about $ 33 billion this decade and generate positive cash flow in 2031.

Morgan Stanley predicted last year that SpaceX would become a $ 100 billion company – at a time when SpaceX’s valuation was $ 44 billion.

“More than one customer has told us that if Elon Musk is going to be the first billionaire … it won’t be because of Tesla. Others have said that at some point SpaceX could be the highest rated company in the world – in any industry, ”said Jonas.

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