Defence & Aerospace · Space & Satellites
Valuing Space Stocks (EV/sales, Runway)
How to compute EV/sales for pre-profit space stocks, cross-check with EV/EBITDA once earnings are real, and overlay cash runway before reading the multiple.
Selborne Research · Space & Satellites coverage: 7 guides, 6 company profiles, a primer and Excel model
Educational analysis. This guide is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
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Pre-Profit Names Trade EV/Sales; Profitable Operators Cross-Check EBITDA
Space equities span launch manufacturers still loss-making at adjusted EBITDA, data subscriptions approaching breakeven, and mature LEO operators with positive GAAP earnings. The valuation entry point depends on profitability stage. Pre-profit names screen on enterprise value ÷ filed LTM revenue. Once operational EBITDA (OEBITDA) or adjusted EBITDA is representative, EV/EBITDA and subscriber economics take over.
Figures below use FY2025 filed revenue. Fiscal year-ends differ: Viasat 31 Mar 2025; Planet 31 Jan 2025; others calendar 31 Dec 2025.
Computing the EV/Sales Screen
Enterprise value is market cap plus debt less cash from the filed balance sheet. Whether that adjustment matters depends on how much debt sits on the balance sheet relative to the cap.
Rocket Lab shows which items go in: its convertible notes add to enterprise value and its ~$1.10B of liquid cash and investments comes off, before the total is divided by $601.8M of FY2025 revenue. Iridium shows the adjustment matters for a profitable operator too: it carries a term loan, so enterprise value sits above market cap and market cap divided by revenue understates its multiple. Both names need the adjustment for the same reason: a lender’s claim ahead of equity changes what equity is buying.
EV/Sales Screening Bands (Pre-Profit)
These bands, on filed LTM revenue, are this guide’s own working convention and cite no source:
| Band | Multiple | What sits behind it |
|---|---|---|
| Revenue-scale or balance-sheet-driven | <15x | Scale, debt or a filed going-concern flag dominates the ratio |
| Backlog / subscription | 15-35x | Visible contracted or subscription revenue supports current-year revenue |
| High-growth / constellation | 35-75x | Current revenue is small next to the launch or build programme still under way |
| Furthest ahead of trailing revenue | >75x | Current revenue is smaller still against the scale the company is building toward |
A low multiple does not read the same way in every case. A filed going-concern flag changes what the ratio means: EchoStar’s 10-K flags substantial doubt over its 2026 debt maturities, after an impairment-driven FY2025 GAAP net loss of $(14.5)B. Where that kind of flag is filed, the debt and refinancing detail has to come before any revenue multiple means anything on its own.
Profitable-Operator Cross-Check: Iridium
Iridium is the filed counterexample to EV/sales-only thinking:
| Metric | FY2025 | Valuation read |
|---|---|---|
| Revenue | $871.7M (+5%) | Mature LEO operator |
| OEBITDA | $495.3M | ~57% margin on revenue, computed |
| Net income | $114.4M | GAAP profitable |
| Billable subscribers | 2.54M | Voice, IoT, broadband ARPU disclosed |
With nearly $500M of OEBITDA on $871.7M of revenue, Iridium’s economics are a connectivity operator’s. The Iridium profile covers the EMSS (Enhanced Mobile Satellite Services) government contract and subscriber mix. Globalstar, covered below, is adjusted-EBITDA positive too, yet still screens on EV/sales. Profitability alone does not decide which multiple applies.
Pre-Profit Anchors: Rocket Lab, Planet, Globalstar
Rocket Lab: Backlog $1.85B, adjusted EBITDA loss $(101.2)M, OCF runway ~6.6 years on ~$1.10B liquid ÷ $165.5M OCF used. Most of the Space Development Agency (SDA) $816M space-systems contract is still undelivered backlog. See the Rocket Lab profile.
Planet: Revenue $244.4M (+11%), backlog $503.7M, adjusted EBITDA loss $(10.6)M with Q4 +$2.4M. OCF runway ~15 years on OCF burn alone, with GAAP net loss divergence flagged. Its backlog is subscription and contracted data revenue. See the Planet profile and cash runway guide.
Globalstar: Revenue $273.0M, adjusted EBITDA $136M (50% margin), Apple 63% of revenue, deferred revenue $869M. It is EBITDA-positive. Capex ran at 201% of revenue, and Apple prepayments funded it. See the Globalstar profile and constellation capex guide.
Runway Overlay
| Name | OCF runway | What the runway calculation captures |
|---|---|---|
| Rocket Lab | ~6.6 yr (extended) | Constellation and range capex (~26% of revenue) sits outside the OCF burn used here; it is tracked separately |
| Planet | ~15 yr on OCF (extended) | OCF burn alone is small; the wider GAAP net loss is a separate figure and needs its own caveat |
| Globalstar | OCF-positive | Not runway-constrained; Apple prepayments fund capex |
| EchoStar | Going-concern flag | The constraint is debt maturities, which the runway metric does not capture |
A long runway is no basis for a forward revenue multiple without filed guidance. It means only that operating cash outflow, at current scale, will not exhaust liquidity soon. It says nothing about debt maturities.
What Not to Do
- Do not compare an operator’s multiple against a launch-stage multiple on the number alone, without segment, debt and EBITDA context.
- Do not apply pre-profit bands to a GAAP-profitable operator such as Iridium; use OEBITDA and subscribers instead.
- Do not compute forward EV/sales from management revenue targets unless filed as guidance. Rocket Lab’s Q2 2026 EBITDA guidance is loss-only, with no revenue figure attached.
- Do not ignore debt where a going-concern flag is filed. Compute EV with the full debt adjustment before comparing across names such as EchoStar.
The accompanying model’s DCF sensitivities discount at 12.0% nominal, an illustrative assumption set above the 9.0% used for defence primes.
Building the Valuation Screen
- Compute EV/sales on filed LTM revenue at build-date price.
- Classify pre-profit vs EBITDA-positive vs GAAP-profitable; switch to EV/EBITDA where EBITDA is representative (IRDM, VSAT).
- Map pre-profit multiples to screening bands (<15 / 15-35 / 35-75 / >75).
- Overlay OCF runway and debt maturities (RKLB extended vs SATS going-concern).
- Cross-check backlog or deferred revenue visibility from the government backlog guide.
Rocket Lab and Iridium are both “space” by sector label. They are not peers on the same multiple without adjusting for layer, profitability and funding risk.
Space & Satellites Sector Primer
Revenue ramp, margin and capex are the inputs. This primer takes both a pre-profit builder and a profitable operator to a discounted cash-flow value against an EV/sales screen.
- 15 sections, pre-profit ramp and mature operator apart
- 40 pages
- pre-profit ramp DCF and profitable-operator FCF DCF
- 2 worked valuations
- EV/sales, capex intensity, cash runway, government mix
- 6-company screen
The Excel model is the primer's two worked valuations live across 12 sheets: a ten-year free-cash-flow DCF for a profitable operator, and a pre-profit ramp builder that fades losses to a target margin and carries a cash-runway and capex bridge. Change the growth path, the exit multiple or the capex intensity and the value moves.
See what's in the Space & Satellites Sector Primer →£25 PDF · £59 with the Excel model · £159 for all three Defence & Aerospace industries
Frequently Asked Questions
- Why use EV/sales for pre-profit space stocks?
- When adjusted EBITDA or net income is negative or not yet representative, enterprise value divided by filed LTM revenue is the primary cross-peer screen. Enterprise value is market cap plus debt, including convertible notes, less cash and liquid investments, all at the same build date; divide it by filed LTM revenue. Once adjusted EBITDA or operational EBITDA (OEBITDA, the non-GAAP measure some operators report) becomes representative, EV/EBITDA and subscriber economics take over as the cross-check; Iridium is the filed example, with OEBITDA $495.3M on $871.7M revenue.
- What EV/sales bands apply to pre-profit space names?
- On filed LTM revenue, this guide uses its own unsourced working convention: below 15x, where scale or balance-sheet factors dominate; 15-35x, where visible contracted or subscription revenue supports the multiple; 35-75x, where current revenue is small next to the business still being built; above 75x, where current revenue is smaller still against the scale the company is building toward. Filers in the same sector can land in different bands because each sits at a different revenue stage with a different balance sheet, not because one is a better or worse holding.
- How does cash runway overlay EV/sales?
- Rocket Lab's roughly 6.6 years of OCF runway, on $1.10B of liquidity against $165.5M of OCF used, gives it time to grow revenue before liquidity becomes the constraint. A going-concern flag, such as EchoStar's 10-K disclosure of substantial doubt over its 2026 debt maturities, is a different risk altogether: a debt maturity wall. Planet's roughly 15-year runway on OCF burn alone still needs a GAAP-loss caveat, because OCF understates the total loss. Runway and the revenue multiple have to be read together; see the cash runway guide.
- Can you use forward EV/sales without filed guidance?
- No for published analysis. Forward revenue multiples without filed company guidance are speculative. Rocket Lab Q2 2026 adjusted EBITDA guidance (loss $(20)-$(26)M) is forward-looking only. Planet management statements on cash-flow crossover within 24 months are forward-looking statements without filed support. Screen on filed LTM revenue and recompute EV at the build-date price (10 Jun 2026 caps).
Read next
Cash Runway in Pre-Profit Space Names
Liquidity ÷ |OCF burn| for Rocket Lab (~6.6 yr) and Planet (~15 yr on OCF): why net loss misleads, capex is separate, and EchoStar needs a debt lens.
Satellite Constellation Capex and Economics
Upfront-build economics vs operating burn: FY2025 capex intensity from Iridium 11.5% to Globalstar 201%, historical Kuiper and Iridium NEXT anchors, and why OCF ≠ satellite build spend.
See it applied
These company profiles apply the concepts from this guide to real public companies.