SpaceX is set to release its first quarterly earnings report since going public at 4:00 AM Beijing time on Wednesday (after the US market close on Tuesday). However, analysts warn that short-term profit and loss figures offer limited value in assessing the investment potential of this space company. The true determinant of its future trajectory is the commercial advancement of the Starship heavy-lift reusable rocket.

According to analyst expectations compiled by Bloomberg, SpaceX is projected to report an operating loss of approximately $1.6 billion for the quarter, with capital expenditures reaching around $18 billion. The primary drag on performance is its AI business, formed after CEO Elon Musk integrated his xAI venture into SpaceX. This division is expected to post an operating loss of $2.4 billion in the second quarter. Currently, the Starlink satellite internet service is the only profitable segment of the company.

Meanwhile, SpaceX stock has been under pressure since its historic IPO on June 12. The company priced shares at $135 each. The closing price climbed to a peak of $201.80 on the third trading day, giving it a market capitalization of $1.5 trillion. However, as of Monday's close, the stock had fallen to $114.46, a decline of more than 15% from its IPO price. With lock-up periods for early shareholders and insiders beginning to expire this Thursday, the stock could face further downward pressure.

Earnings Figures Offer Little Guidance; Starship is the Core Variable

Bloomberg Opinion columnist Thomas Black notes that in the early stages of SpaceX as a public company, quarterly earnings data will be of minimal value to investors. The company's Space business, while persistently loss-making, provides launch services at cost to its Connectivity segment. The AI business is currently the largest drag on profits. Whether it can turn profitable in the fourth quarter as expected—swinging from a $2.5 billion loss in the first quarter to profitability, and boosting revenue from $800 million to $8.8 billion—will be a key focus of the second-half earnings reports.

What can truly provide direction for investors is the commercialization timeline of Starship. On July 24, SpaceX successfully completed the test launch of the third version of the Starship, which is designed for mass production. The test successfully guided the spacecraft to a soft landing in the Indian Ocean, but it has not yet achieved recovery and reuse of the spacecraft section.

Full Reusability is Key to Cost Reduction; Commercial Maiden Flight Timeline Under Scrutiny

Starship's core value proposition lies in its complete reusability. Once both the rocket booster and the spacecraft can be recovered and reused, combined with its immense payload capacity, launch costs are expected to drop significantly. This would make emerging businesses like space-based data centers economically viable.

SpaceX has publicly stated its goal is to make spaceflight as routine as commercial aviation. The company has already constructed a new launch pad at its Starbase facility in Texas, capable of launching a Starship once per hour. However, the timeline is narrowing. Starship needs to enter commercial operations by next year to participate in NASA's Artemis III mission. This involves completing a docking demonstration between the Starship lunar lander and Lockheed Martin's Orion spacecraft. Subsequently, Starship will be tasked with landing astronauts on the lunar surface and will need to successfully demonstrate in-orbit refueling, a critical technology.

Heat Shield System and Lock-Up Period Create Dual Pressure

On the technical front, a major obstacle to reusing Starship is its heat shield system. The spacecraft must withstand temperatures exceeding 2,500 degrees Fahrenheit during re-entry. The reliability of the heat shield tiles is crucial—the 2003 Columbia space shuttle disaster was caused by damage to its thermal protection system. SpaceX is currently developing a solution, and the market expects the company to provide more details during its first earnings conference call.

On the stock price front, RBC Capital Markets analyst Ken Herbert suggests in a research note that SpaceX's stock price trajectory could resemble that of Meta Platforms in its first year after going public. Meta also had a phased lock-up schedule, and its stock traded below the IPO price for an extended period. SpaceX's lock-up period will extend until next June, when a large portion of shares held by Musk himself become eligible for sale. This persistent overhang could keep the stock under pressure for a long time, but it could also create a valuation opportunity.

Commercialization of Starship's First Flight is the True Turning Point

Thomas Black concludes that until Starship achieves its first commercial launch, SpaceX's quarterly earnings reports will fail to provide investors with a clear roadmap. The company's future growth logic is built on an increasing frequency of Starship flights and the gradual phasing out of its current workhorse rocket, the Falcon 9.

What investors should focus on most during this earnings season is management's latest commentary on the Starship commercialization path and specific details of the testing schedule. This is the core information needed to cut through current market noise and assess SpaceX's long-term value.