How to value SpaceX? The more launches, the higher the price!
As SpaceX's launch frequency continues to climb, a counterintuitive trend is emerging: the market's premium valuation per launch is not being diluted, but rather rising significantly. This phenomenon is not driven by sentiment, but is a direct reflection of a fundamental transformation in its business model.
Renowned investor Thomas Laffont proposes the “CODE” four-stage framework to explain this logic: Connectivity, Observation, Domain Awareness, and Expedition.
During his research, he found that the launch frequency is highly positively correlated with the company’s overall valuation, which aligns with intuition. However, when further calculating the “valuation per launch” (valuation ÷ number of launches), the data shows a counterintuitive trend: this ratio remained relatively constant in the early phase, and later moved up significantly—the more launches, the higher the premium per launch.
Laffont believes that with each new stage in the CODE framework, the service value carried by a single launch jumps significantly. The denser the launches, the higher the quality of the business model, leading to a reconstruction of valuation logic.
CODE Framework Breakdown: Four Valuation Leaps from Rocket Company to Space Platform
Stage One (C): Pre-Constellation Validation
At this stage, SpaceX mainly acts as a rocket launch service provider. The core task is technology testing and validation, with clients concentrated in NASA and a few commercial satellite companies. Laffont characterizes this as a “one-off, non-recurring revenue” model—revenues are sporadic and unpredictable, and the valuation multiples assigned by the market are relatively low.
Stage Two (O): Initial Climb
As launch frequency increases, SpaceX begins to build its own Starlink low earth orbit satellite constellation. Laffont considers this the critical turning point in the business model: the formation of the constellation means that the end market truly emerges and the business shifts from one-off revenues to recurring subscription revenues. The more satellites, the more ground broadband users, leading to significantly enhanced predictability and sustainability of revenues. The company essentially becomes closer to a global telecom service provider.
Stage Three (D): Large-scale Multi-Constellation
Once launch and operation capabilities reach scale, the target clients extend from consumers to multinational corporations, governments, and militaries. Laffont notes that since other players lack equally efficient and low-cost launch capabilities, they can only commission SpaceX to custom-build exclusive constellations—Starshield is a typical example. B2B and government profitability grows exponentially, and diversified customer structures further fortify the moat.
Stage Four (E): Ecosystem and Platformization
This is the ultimate form of the CODE framework. Laffont believes that SpaceX will transform from a hardware and network provider into a commercial platform for the space age. Platformization implies ultra-high monopoly barriers and almost unlimited optionality, including space data centers, lunar and Mars freight route monopolies, and foundational infrastructure supporting all future space applications. He notes that the market valuation logic for platform companies has already been well-validated in the tech era.
The More Launches, the Higher the Moat
Laffont’s underlying logic is completely different from traditional manufacturing or transportation industries. In traditional industries, doubling output often leads to diminishing profit margins; SpaceX is the opposite—the more launches, the better the overall quality of the business model.
He summarizes this process as turning a capital-intensive, high-risk heavy industry (first stage) into a super platform with a massive moat, able to monopolize global telecom and space profit pools (fourth stage). It is this fundamental transformation that explains why, as SpaceX approaches IPO, the premium carried by each launch is not falling but rising, with increases of several times or even tenfold.
For investors, Laffont’s framework offers a new dimension of valuation: the key is not the current number of launches, but in determining which CODE stage the company is in, and the speed and certainty of its transition to the next stage.
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