SpaceX and Honeywell Aerospace: Two Different Paths to Space Success
SpaceX and Honeywell Aerospace are two companies that operate in the space industry, but they have different business models. SpaceX is building a utility-scale network of satellites, launch capacity, and data centers, financing it like a growth company with a $25 billion bond issue and $85.7 billion of IPO proceeds. In contrast, Honeywell Aerospace is more like a toll road, generating revenue from aftermarket parts and repairs on aircraft already flying.
Honeywell Aerospace's stock (HONA) has been marked down 25.5% since its first regular-way session on June 29th, trading at around 15 times this year's guided adjusted EBIT on an enterprise-value basis. SpaceX's stock (SPCX), on the other hand, needs to lift December revenue to roughly 3.2 times its second-quarter monthly rate to reach the $100 billion annualized run-rate management has promised.
The two companies have different growth prospects and valuations. Honeywell Aerospace is trading at a lower multiple than SpaceX, despite having a more stable business model. The Street is split on the two stocks, with some analysts upgrading their targets for HONA while others downgrading it.