By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panelists agreed that the article's comparison of SpaceX and Eli Lilly is flawed, with SpaceX's high valuation hinging on uncertain future growth and regulatory risks, while Lilly faces payer constraints and competition. The two-year horizon was deemed too short for confident predictions.
Risk: Regulatory risks for SpaceX, including potential 'Starlink-as-a-utility' traps and reimbursement pressure for Lilly's obesity franchise.
Opportunity: SpaceX's potential upside if Starlink monetization and launch demand deliver, despite high initial losses.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
SpaceX could be one of the largest IPO stocks in history, at a time when the broader market is already very expensive.
Eli Lilly has become a huge winner in obesity drugs, and it just launched a game-changing pill, with another next-generation product potentially on the way.
These two stocks will likely move in different directions, at least over the short to medium term.
Is there any hotter name on Wall Street right now than SpaceX? The Elon Musk-led space and rocket launch services juggernaut is preparing to go public, and it could be the largest initial public offering (IPO) in history. SpaceX could reportedly go public at a valuation of $1.8 trillion, instantly making it one of the world's largest companies.
It would put it ahead of Eli Lilly (NYSE: LLY), the pharmaceutical giant that has become the leader in obesity drugs. That's not to knock Eli Lilly, which happens to be a behemoth in its own right, carrying a market cap just over $1 trillion today.
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What does SpaceX have to do with Eli Lilly? There's a hot take cooking.
Resist the hype and avoid the SpaceX IPO. Instead, consider putting your hard-earned capital in Eli Lilly. I don't believe it will take that long to prove that decision right. Here's why I predict Eli Lilly will be worth more than SpaceX in just two years.
Frankly, history is against SpaceX's stock performing well, at least in the short term. Dimensional Fund Advisors researched IPO stock performance using a hypothetical portfolio tracked over 18-year periods from 1992 to 2018. The study found that IPO stocks tend to underperform the broader market.
Companies often IPO during strong stock markets with hype and fanfare from investors. After all, the point of an IPO is to raise as much money as possible for the company. SpaceX, given its expected $1.8 trillion valuation, has drummed up plenty of excitement.
Plus, the broader market isn't just doing well, it's near all-time highs. The S&P 500 index's Shiller P/E ratio currently sits near its highest level on record. Only the infamous 1999 dot-com market bubble tops it. SpaceX could be the largest IPO in history, at a time when the broader market's valuation is near its all-time high. Those aren't good conditions for strong investment returns.
Eli Lilly is firing on all cylinders in the obesity drug market. Its success with Mounjaro and Zepbound has driven staggering growth over the past few years, and that should only continue. For starters, Eli Lilly just launched Foundayo, following its FDA approval on April 1, 2026. Foundayo is just the second GLP-1 pill on the market, and the only one that patients can take without food or water restrictions.
Additionally, Eli Lilly's experimental triple-hormone agonist Retatrutide is a next-generation obesity drug that some experts believe could be a grand slam, based on the outstanding test data it has produced in clinical trials. It seems likely that Eli Lilly can maintain its momentum in an obesity drug industry that Morgan Stanley estimates could grow from $79 billion in 2025 to $195 billion by 2035.
Obesity drugs will likely remain a core growth engine for Eli Lilly for the foreseeable future. Analysts currently see the company growing its earnings by a blistering 25% annually for the next three to five years.
SpaceX's IPO concerns aren't just circumstantial; the company will go public at a breathtakingly expensive valuation. It had a net loss of $4.9 billion last year, so you can't value its stock on earnings. At a $1.8 trillion valuation, SpaceX would trade at 96 times revenue, which was $18.7 billion in 2025. Stocks rarely reach, let alone sustain, valuations that high.
Suppose SpaceX's valuation drops to 30 times sales over the next two years. That's very possible. Snowflake was a red-hot IPO stock back in 2020. After an initial surge, it punished investors for several years as its valuation fell back to earth.
Back to SpaceX. The company grew revenue by 33% in 2025. If that growth repeats this year and next, its roughly $33 billion in 2027 revenue, at 30 times those sales, would value SpaceX at $990 billion. In other words, SpaceX stock could drop nearly 50% despite very strong growth.
That alone would drop the stock below Eli Lilly's current valuation. Meanwhile, Eli Lilly has room to rise. Despite its trillion-dollar market cap, the stock trades at 39 times earnings. That's a compelling price tag for the growth analysts anticipate. At a price/earnings-to-growth (PEG) ratio of just 1.2, investors can reasonably expect double-digit investment returns as Eli Lilly's earnings pile up.
Investors could be looking at two stocks that can easily head in different directions over the next two years. Unfortunately for SpaceX, it's probably not the one going up.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Snowflake. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"The article correctly identifies SpaceX's valuation risk but incorrectly assumes that risk automatically flows to LLY's upside—each stock faces distinct, material headwinds the article minimizes."
The article's SpaceX valuation math is sound—96x revenue is unsustainable, and a compression to 30x would indeed crater the stock despite 33% growth. But the article conflates 'SpaceX stock underperforms' with 'Eli Lilly outperforms,' which aren't the same bet. LLY at 39x earnings with 25% EPS growth looks reasonable on a PEG basis, but obesity drug adoption curves flatten, competition (Novo Nordisk, Viking) intensifies, and reimbursement pressure is real. The article also ignores that SpaceX's revenue growth could accelerate (Starshield, Starlink revenue synergies) or that LLY's multiple could compress if obesity drug growth disappoints. Two-year horizon is too short to call with confidence.
SpaceX's government contracts (Starshield, national security) and Starlink's revenue trajectory could justify a higher multiple than typical SaaS comps, while LLY faces patent cliffs on non-obesity drugs and obesity drug market saturation risks the article downplays.
"Lilly's projected earnings growth is already reflected in its current multiple, so outperformance versus a post-IPO SpaceX hinges on execution risks the article largely ignores."
The article's core claim leans on SpaceX's likely post-IPO multiple compression versus Lilly's 25% EPS growth at a 39x P/E and 1.2 PEG. Yet it underplays Lilly's exposure to GLP-1 reimbursement cuts, compounding pharmacy margins, and upcoming Retatrutide competition from oral candidates at Pfizer and Amgen. SpaceX's 2025 revenue base of $18.7B already embeds Starlink scale that could drive faster top-line expansion than the assumed 33% CAGR. Historical IPO underperformance data cited is from 1992-2018 and ignores recent mega-cap tech debuts that held elevated multiples when growth exceeded 30%. Valuation math assumes SpaceX revenue stays flat at 30x; any acceleration in launch cadence or government contracts would invalidate the $990B endpoint.
Lilly's obesity franchise could face faster-than-expected generic erosion or Medicare Part D redesign that caps pricing power, while SpaceX's defense backlog and Starlink subscriber ramp might justify sustaining a 50x-plus sales multiple for longer than the article models.
"Eli Lilly’s valuation is supported by tangible earnings growth, whereas a $1.8 trillion SpaceX IPO would require an unsustainable price-to-sales multiple that ignores the cyclical risks of the aerospace sector."
Comparing LLY to a hypothetical SpaceX IPO is a category error. LLY is a mature, high-margin pharmaceutical powerhouse with a clear PEG ratio of 1.2, suggesting it is priced reasonably for its 25% earnings growth. Conversely, valuing SpaceX at $1.8 trillion implies a 96x price-to-sales multiple, which is detached from the reality of capital-intensive aerospace operations. While GLP-1 demand is currently insatiable, the risk for LLY lies in long-term pricing pressure and potential patent cliffs. However, SpaceX’s valuation requires perfect execution in a high-interest-rate environment, making LLY the fundamentally sounder play for capital preservation and growth over a two-year horizon.
The bull case for SpaceX ignores that it is a platform company with a near-monopoly on orbital launch capacity, potentially justifying a 'tech-platform' valuation multiple that traditional pharma simply cannot command.
"SpaceX’s upside, driven by Starlink and launch services, could justify a higher two-year valuation than Lilly, making the article’s claim uncertain."
Prediction hinges on SpaceX IPO at $1.8T versus Lilly’s ~$1T market cap, implying two years of diverging paths. The Lilly bull case—GLP-1 momentum, Foundayo, Retatrutide—ignites growth, but the piece overlooks IPO risk and the still-elevated macro environment. A unicorn like SpaceX carries great optionality, yet its profitability story is unproven in public markets; at 96x revenue, any slowdown in growth or higher capex could crush returns. Lilly faces payer constraints and looming competition from Novo Nordisk, which could cap multiple expansion. The real risk: SpaceX’s potential upside could outpace Lilly if Starlink monetization and launch demand deliver, even with high initial losses.
Devil’s advocate: If SpaceX’s revenue accelerates beyond optimistic forecasts and the IPO window remains generous, the stock could re-rate well above Lilly, making the article’s thesis look even more flawed. The piece assumes a downside scenario for SpaceX that may not materialize if capital markets flex and Starlink monetization hits scale.
"LLY's downside from policy shock (Medicare pricing power) is larger and more imminent than SpaceX's multiple compression risk."
Gemini calls this a 'category error,' but that's imprecise. The article's real flaw isn't comparing pharma to aerospace—it's assuming SpaceX's 96x revenue multiple *must* compress to 30x post-IPO. ChatGPT flags optionality correctly, but nobody's quantified the reimbursement cliff risk for LLY's obesity franchise if Medicare negotiation accelerates in 2025-26. That's the underexplored tail risk that could crater LLY faster than SpaceX multiple compression.
"SpaceX's defense backlog faces sharper political execution risk than Lilly's Medicare exposure over the next two years."
Claude flags LLY reimbursement as the key tail risk, but this ignores how SpaceX's $1.8T valuation hinges on Starshield contracts vulnerable to 2025 congressional budget fights. Defense revenue assumptions could unravel faster than GLP-1 pricing pressure if appropriations stall, invalidating the multiple-support thesis and accelerating compression beyond the modeled 30x.
"SpaceX's path to a $1.8T valuation invites regulatory oversight that will likely cap margins, rendering the high revenue multiple permanently unsustainable."
Grok, your focus on congressional budget fights for Starshield is narrow. The real risk is the 'Starlink-as-a-utility' trap. If SpaceX scales to $1.8T, they become a de facto critical infrastructure provider, inviting regulatory scrutiny that forces 'utility-like' margin caps, not just revenue compression. LLY’s reimbursement risk is a margin squeeze, but SpaceX’s regulatory risk is an existential threat to its monopoly pricing power. We are over-indexing on revenue multiples and ignoring the terminal value impact of future antitrust regulation.
"SpaceX’s $1.8T bull case relies heavily on Starlink monetization and capex efficiency; delays or underperformance here could trigger a sharper re-rating than regulatory concerns alone."
Gemini's 'utility trap' may be right about regulatory risk, but the bigger flaw is not quantifying SpaceX’s capex and Starlink monetization sensitivity. If Starlink revenue and Starshield orders come in below plan, or budget fights delay subsidies, the $1.8T endpoint unravels far faster than a growth multiple compression. SpaceX’s moat is conditional on execution, not guaranteed, and that fragility should prune the bull case more than the regulatory risk alone.
The panelists agreed that the article's comparison of SpaceX and Eli Lilly is flawed, with SpaceX's high valuation hinging on uncertain future growth and regulatory risks, while Lilly faces payer constraints and competition. The two-year horizon was deemed too short for confident predictions.
SpaceX's potential upside if Starlink monetization and launch demand deliver, despite high initial losses.
Regulatory risks for SpaceX, including potential 'Starlink-as-a-utility' traps and reimbursement pressure for Lilly's obesity franchise.