SpaceX says it's worth $1.75 trillion. The 'dean of valuation' says that's half a trillion too high

As investors wait for the first trade, a growing number of financial experts are saying SpaceX is aiming too high with its IPO. And the latest is a professor who is best known as the “dean of valuation.”

Aswath Damodaran, a professor at NYU’s Stern School of Business, says he believes SpaceX’s equity value is roughly $1.3 trillion, nearly a half trillion less than the company claims.

Speaking on The Wall Street Journal’s Take On the Week podcast, Damodaran raised issues with the “total addressable market” that SpaceX discussed in its S-1 filing. The company claims the AI division could see revenue opportunities of $26 trillion. Damodaran says that’s “reaching the end of what’s plausible and pushing beyond,” especially given the unit’s current heavy losses.

He’s hardly the only person pumping the brakes on the well-hyped IPO.

“Significantly overvalued”

Damodaran’s comments come just days after Morningstar warned potential investors that the valuation SpaceX was touting was at too high an orbit. Morningstar analyst Nicolas Owens says his fair value estimate of the company’s worth is roughly $780 billion, less than half of what the company is targeting.

“We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” he wrote.

Ed Elson, an analyst who also co-hosts the Prof G Markets podcast with entrepreneur Scott Galloway, has also taken a very skeptical look at the company’s S-1 filing.

“The stock is set to be priced at 107 times sales, which would make it one of the most expensive stocks in history,” he wrote. “It will be twice as valuable [as] Walmart while generating less revenue than Macy’s.”

Will investors care?

While the number of red flags from analysts are growing, that may not have much of an impact on the IPO—and those analysts acknowledge that.