Even after cooling off from its post-IPO rally, Space Exploration Technologies (SPCX 5.05%), better known as SpaceX, has a market cap of $2.25 trillion and is one of the most valuable companies in the world. Based on its revenue of about $19.3 billion over the past four quarters, SpaceX has a price-to-sales ratio of about 116.

Let’s be clear. That’s an incredibly high multiple. Some of the most rapidly growing AI infrastructure stocks trade for P/S multiples in the 40-50 range. The average S&P 500 company trades for about 3x sales. But there’s more to the story. The price-to-sales ratio of 116 is a backward-looking metric. The more important thing to consider is whether SpaceX’s revenue in 2027, 2028, and beyond will justify it.

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