SpaceX vs Tesla: valuation, economics, and pairs-trade viability compared

A comparative valuation and fundamental analysis of SpaceX and Tesla examines the financial profiles, gross economics, and the viability of a pairs trade between the two Elon Musk-led companies. While neither stock currently screens as undervalued according to fair-value modeling, Tesla provides a more stable relative value due to its proven earnings base and positive free cash flow. In contrast, SpaceX boasts higher gross margins but remains burdened by substantial cash burn and a valuation heavily dependent on future execution. Financial data highlights SpaceX's $2.01 trillion market capitalization and 51.9% gross margin on $23.04 billion in revenue, contrasted with a -$32.52 billion levered free cash flow and a -35.7% net margin. Meanwhile, Tesla commands a $1.40 trillion market cap, generating $103.62 billion in revenue, a 3.7% net margin, and $5.76 billion in levered free cash flow, trading at a 382.1x P/E ratio. Ultimately, a pairs trade between the two equities is deemed unviable due to limited historical price data for SpaceX, distinct business fundamentals, and an unstable statistical correlation, leaving hedged strategies exposed to significant basis risk.