As Elon Musk's space company SpaceX pursues what could be the biggest initial public offering on record, an analysis says its currently suggested valuation is far above its fair value. Investment information firm Morningstar valued SpaceX at about $780 billion and said that falls short of half the $1.75 trillion figure discussed in the market.

CNBC reported on Tuesday that Morningstar said in a recent report that SpaceX's targeted listing valuation has been set excessively high. The company said it applied a discounted cash flow model and calculated SpaceX's fair value at about $780 billion.

SpaceX is pushing for a Nasdaq listing this month and is said to be considering raising about $75 billion through the IPO. If it proceeds as planned, the company would be valued at $1.75 trillion, making it one of the largest IPOs ever.

Morningstar said the current listing price is not an attractive entry opportunity for long-term investors. Analysts said in the report, "SpaceX is significantly overvalued," and said there is a possibility of an opportunity to invest at a lower price after listing. They said that for long-term investors, a later point rather than immediately after listing would offer a better margin of safety.

Morningstar's biggest concern is SpaceX's profit structure. SpaceX posted a net loss of $4.28 billion in the most recent quarter and recorded a deficit of $4.94 billion for full-year 2025. By segment, satellite internet service Starlink generated $3.26 billion in revenue in the most recent quarter, accounting for about 69 percent of total revenue.

In contrast, the space business segment posted an operating loss of $619 million, and the artificial intelligence business segment posted a loss of about $2.5 billion. For now, Starlink is effectively acting as the only source of profit.

Concerns are especially high over the AI business. Morningstar said there is significant uncertainty over how much profitability SpaceX's AI business, xAI, can secure in the future. Analysts said xAI's economic competitive advantage has not yet been proven and could instead weigh on the company's overall value.

SpaceX also acknowledged uncertainty over securing profitability in its registration statement (S-1). The company said, "We have incurred net losses in the past and may not achieve profitability in the future." It also expected substantial capital expenditures for years before AI products and services begin generating revenue in earnest.

Morningstar also held an optimistic view on short-term share price moves. It said shares could rise soon after listing given a limited initial free float, participation by major investment banks in the IPO and strong investment demand for AI infrastructure-related stocks. It also cited the possibility of inclusion in the Nasdaq 100 index as soon as 15 trading days after listing as a positive factor for supply and demand.

It said those expectations do not justify the current valuation. The market is also pointing to a lack of information as a major risk factor. Dan Coatsworth (댄 코츠워스), head of market strategy at investment platform AJ Bell, said that because SpaceX has been a private company, disclosed financial information is limited, and Musk holds about 85 percent of voting rights, leaving external investors with little information they can identify.

He said that applying the currently discussed $1.75 trillion valuation puts SpaceX's enterprise value-to-sales multiple at about 67, which is about three times higher than Nvidia's valuation based on its most recent fiscal year.

The industry sees a high likelihood that the listing itself will be successful. Over the longer term, it is expected that a key task will be whether profitability improvements in businesses other than Starlink and the AI business' growth potential can support the company's actual value.

Ultimately, the debate surrounding SpaceX is focusing not on whether the listing succeeds but on whether it can prove through results a super-sized valuation of $1.75 trillion.