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SpaceX heads into earnings with Tesla merger talk in the foreground
SpaceX is set to report its third-quarter results after the closing bell on October 20, with investors looking for signs that its expanding businesses can generate the cash needed to fund Musk's ambitions. Our live coverage begins ahead of the release.
A possible merger with Tesla is also drawing attention. That discussion remains speculative: RBC Capital Markets has modeled a transaction, but says it has no knowledge of an actual deal.
The merger question reaches earnings day
RBC analyst Tom Narayan's hypothetical model puts a SpaceX acquisition of Tesla at $480 per Tesla share and values the combined business at $3.74 trillion. It assumes an all-stock transaction, leaving SpaceX shareholders with 52% and Tesla holders with 48%.
In July, RBC's model had valued the combined business at $3.31 trillion and assigned Tesla holders 54%. Its revised ownership split reflects SpaceX's higher valuation. The potential appeal, in RBC's view, is bringing Tesla's robotics and manufacturing together with SpaceX's AI infrastructure.
In a separate earnings preview, RBC pointed directly to the growing discussion:
“Moreover, investor interest around a potential merger with TSLA is increasing,” the bank said.
What to watch in the results
SpaceX's investor calendar lists today's Q3 earnings event. Koyfin estimates cited in the preview put expected revenue at about $13 billion and adjusted earnings at $0.13 per share.
Starlink's expansion, the recent spectrum purchase and Starship's progress are on RBC's watchlist. The bank kept its Outperform rating and $225 SpaceX price target.
“We anticipate positive commentary from SPCX management with a continued sense of urgency and further pull forward out-year goalposts,” RBC said.
The financial disclosures will also give shareholders a chance to examine cash generation, investment spending and financing commitments. Apex previously covered the debt concerns surrounding SpaceX's Nvidia spending.
Tesla's own earnings follow on October 21, giving investors another opportunity to ask how far the companies' collaboration might go.