SpaceX Stock Is Down 36% From Its Post-IPO Peak. History Says a $10,000 Investment Will Be Worth This Much by June 2027.

On June 12, Space Exploration Technologies (NASDAQ: SPCX) became the largest initial public offering (IPO) in U.S. history as measured by market value. The rocket and satellite company was worth nearly $1.8 trillion at the listing price of $135 per share.

SpaceX peaked around $202 per share on its third trading day. However, the stock has since fallen 36% to $129 per share, and history says it has further to fall. Here's what investors should know.

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History says SpaceX's stock will drop 13% by June 2027

Highly anticipated IPO stocks frequently notch large gains on the first trading day. SpaceX was no exception; the stock closed just shy of $161 per share (about 19% above the IPO price) on day one. However, companies that go public with large market capitalizations have historically performed poorly over the long term.

Among the 10 largest U.S. IPOs in the last decade, the median stock fell 17% from its IPO price during its first year on the public market. SpaceX priced its IPO at $135 per share. If its performance matches the historical median, the stock will trade at $112 per share by June 2027 (i.e., 17% below its IPO price). That implies 13% downside from the current share price of $129.

In that scenario, $10,000 invested in SpaceX today would be worth $8,820 by June 2027. But there is more bad news: History says SpaceX could decline even further in the interim.

Among the 10 largest U.S. IPOs in the last decade, the median stock dropped 25% from its IPO price at some point during the first year. If SpaceX follows that trajectory, the stock will fall to $101 per share at some point before June 2027. That implies 20% downside from its current price.

SpaceX has compelling growth prospects, but the stock is very expensive

SpaceX's reusable rocket architecture enables the company to launch payloads into orbit more frequently and cost-effectively than its competitors. That economic moat has not only helped SpaceX build the world's largest satellite internet service, Starlink, but also positioned the company to disrupt the artificial intelligence industry with orbital data centers.

SpaceX values its addressable market at $28.5 trillion, and the company attributes the vast majority of that figure ($26.5 trillion) to artificial intelligence products and services. Its SEC Form S-1 (registration statement) states:

We believe SpaceX's reusable rockets, scaled satellite manufacturing, and operational expertise can enable the cost-effective and rapid deployment of massive AI compute satellite constellations -- with potentially millions of satellites -- for orbital data centers. We believe these AI compute satellites in sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand, at far greater scale and efficiency than terrestrial alternatives.

However, SpaceX will not launch orbital data centers until 2028 at the earliest. Meanwhile, the stock currently trades at 88 times sales. By comparison, Palantir Technologies is the most expensive stock in the S&P 500 (SNPINDEX: ^GSPC) at 62 times sales.

That means SpaceX is currently 40% more expensive than the most richly valued member of the benchmark index for the entire U.S. stock market. I doubt that premium is sustainable.

Here's the big picture: History suggests SpaceX stock is headed lower in the coming months. The current valuation hints at the same outcome. That does not mean SpaceX will always be a bad investment. But I think investors should wait patiently for a more attractive buying opportunity. Better entry points are sure to arise eventually.

Consider Uber Technologies. Since its IPO in May 2019, the stock has underperformed the S&P 500 by 99 percentage points. But the stock has also outperformed the S&P 500 by 140 percentage points since July 2022.

The lesson is simple: Uber shareholders who didn't dive headlong into the IPO but waited for a more reasonable buying opportunity have been well rewarded. I believe the SpaceX story will be similar in hindsight.

Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies and Uber Technologies. The Motley Fool has a disclosure policy.