SpaceX reported third-quarter results after the close on 20 October, and the numbers moved the investment case more than any update since the listing. Revenue rose 161% to $14.58bn and the company earned $4.40bn, its first profit as a public company. The shares gained about 7% after hours. The updated Beating The Bull report keeps the rating at Watchlist, but for different reasons than a week ago.

What the quarter showed

AI compute is now the largest business. The Super Intelligence segment brought in $7.56bn, including $608m from the recently acquired Cursor. Starlink added $5.25bn of revenue at a 45% operating margin and 1.6 million new consumer subscribers, reaching 13.6 million. Diluted EPS of $0.35 came in well ahead of expectations, though a $390m tax benefit and about $1bn of other income flattered it. Taxed normally, the figure would be closer to $0.25.

Why the guide matters more

Management guided first-quarter 2027 revenue to $33-37bn. Annualised, that is about $140bn, roughly the 2027 revenue the previous report used for its bull case. On that basis, the base case rises to about $155 a share and the weighted fair value to about $147, up from $140.

The report also lowers the sales multiple it applies, to 14 times from 18. More than half of revenue now comes from renting compute, and that segment earned a GAAP operating margin of only 5.7%. Growth this fast deserves a premium, but low-margin compute rental does not earn a software multiple.

What still holds the rating back

The cost of the growth is capital. Fourth-quarter capex is guided to $35-40bn after $19.6bn in the third quarter, and earlier compute contracts ran for six months. On the call, management declined to detail how a build of about 10 GW in 2027 would be powered or funded.

There is also a governance question. Special committees at SpaceX and Tesla are evaluating a combination, with no terms agreed. Because the same person controls both companies, the exchange ratio matters a great deal to minority holders, and it cannot be sized yet.

Where that leaves investors

At the pre-results close of $147.79, the shares traded almost exactly at the weighted fair value. The after-hours price sits above it. The range of interest moves up to $120-135, from $105-120, and is meant for use after Starship Flight 15 next month. The scenario weights are 25% bull, 45% base and 30% bear.

Segment detail, the two high-impact developments and the full scenario table are covered in the complete SpaceX (SPCX) report on our Reports page.