Defence & Aerospace · Space & Satellites
Space & Satellites Sector Primer
A 40-page primer plus Excel valuation model on space and satellite equity analysis: EV/sales screens, cash runway, constellation capex and backlog definitions.
2026 Edition · data as of June 2026
- pages
- 40
- sections
- 15
- model sheets
- 12
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The full primer
£25 / ~$32
- 40 pages, 15 sections
- Worked examples and applied cases
- 2026 Edition, data as of June 2026
Excel model
Valuation template
£45 / ~$58
- 12 sheets (.xlsx)
- Runs the primer's worked valuations live
PDF + Excel model Best value
Both files together
£59 / ~$76
- The 40-page primer
- The 12-sheet Excel model
- £70 bought separately · £11 less
Complete Defence & Aerospace Library
All three Defence & Aerospace industries: three primers, three Excel models (Defence Primes, Commercial Aerospace, and Space & Satellites).
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Contents
- 01 How Space Companies Make Money
- 02 Listed Company Types
- 03 The Profitability and Constellation Lifecycle
- 04 Segments and Sub-Markets
- 05 Revenue Drivers: Generic Build
- 06 Cost Structure: Capex, Backlog and Runway
- 07 Valuation Frameworks
- 08 Worked Example: Pre-Profit Ramp Discounted Cash Flow (DCF)
- 09 Worked Example: Profitable-Operator FCF DCF
- 10 Applied Cases: Launch and Connectivity
- 11 Applied Cases: Data, Wholesale and Distress
- 12 Key Metrics and Screening
- 13 Risks, Benchmarks and Case Study
- 14 Glossary of Essential Terms
- 15 Quick Reference Cheat Sheet
Worked examples and applied cases · 40 pages · 15 sections · 2 worked valuations
The Excel model
Educational material. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
Space equities split into two kinds that need different tools. Connectivity operators with real earnings are valued on EBITDA and subscribers. Launch providers, constellation builders and data names that have not reached profit are valued on revenue multiples, cash runway and constellation capex, and the first question is whether they survive to the earnings the multiple assumes.
Space stock valuation benchmarks by profitability stage
Stage decides the tool. A pre-profit launch name and a mature satellite operator can sit an order of magnitude apart on EV/sales because the multiple measures different bets. These are the primer's ranges, on last-twelve-months revenue.
| Stage | Method | Typical range | What sets the position |
|---|---|---|---|
| Pre-profit growth (launch, data) | EV/sales with a cash-runway overlay | 35-75x in high growth; above 75x prices scale years ahead of revenue | Runway, backlog cover, contract wins |
| Backlog or subscription visibility | EV/sales | 15-35x | How much revenue is already contracted |
| Constellation build | Adjusted EBITDA plus the capex line | Adjusted EBITDA margin 30-50%; capex above 50% of revenue | Who funds the build: debt, equity or customer prepayments |
| Profitable operator (built LEO fleet) | EV/EBITDA or low EV/sales | EV/sales 4-8x; operational EBITDA margin 50-60% | Subscribers and revenue per user on the built fleet |
| Distressed | Debt-adjusted enterprise value | Below 15x EV/sales, read against the debt | Debt maturities and the refinancing path |
The primer discounts a pre-profit ramp at 12.0%, a 4.50% ten-year Treasury plus a 7.5% early-stage equity risk premium, and a profitable operator at 9.5%. Two overlays decide whether a high multiple survives. Runway on operating cash burn under 12 months is immediate risk, 12-24 months needs quarterly tracking, 24-36 months is adequate and beyond 36 months is extended. Capex above 50% of revenue marks a build phase, 15-30% a fleet refresh and under 15% maintenance. Constellation capex sits outside runway, so a long runway can still hide a funding need.
Worked example: a pre-profit space stock valuation
Take a hypothetical launch and space-systems company with $400 million of revenue growing 30% a year, fading to 10%, and an EBITDA margin rising from -17% to 25% over seven years. Capex holds at 25% of revenue, 21% tax applies once EBITDA turns positive, and year-seven EBITDA is capitalised at a 14x exit multiple.
| Step | Amount |
|---|---|
| PV of years 1-7 free cash flow at 12.0% | -$885M |
| Year-7 EBITDA ($1,418M revenue × 25%) | $354M |
| PV of terminal value ($354M × 14x, seven years at 12.0%) | +$2,245M |
| Enterprise value | $1,359M |
| Implied EV/sales on $400M revenue | 3.4x |
| Cash runway ($0.8B liquidity ÷ $120M operating burn) | 6.7 years |
| Enterprise value at a 40x screen multiple | $16,000M |
The terminal is worth more than the whole company, because the burn years subtract $0.9 billion of present value first. A 40x multiple, inside the high-growth band, prices this company at about 12 times what the cash flows support, and that gap is the optionality the market pays for. The runway looks comfortable at 6.7 years. Yet free cash flow across the seven years sums to -$1.3 billion against $0.8 billion of liquidity, because capex sits outside operating burn. On these inputs the ramp needs about $0.5 billion of new capital.
The exit multiple and mature margin move the answer hard: at 11x and 17% the same ramp is worth $170 million, at 17x and 33% $2,857 million. The primer adds the profitable-operator DCF, then six applied cases on filed results. The Excel model runs the ramp, runway and capex screens on your own inputs.
Which space stock valuation method fits which company
| Company type | Primary method | Check with | Why |
|---|---|---|---|
| Pre-profit launch or data | EV/sales plus operating-cash runway | Backlog cover; capex intensity | No earnings to capitalise yet |
| Profitable LEO operator | EV/EBITDA or low EV/sales, then a ten-year FCF DCF | Subscribers; revenue per user by segment | Operational EBITDA is filed and positive |
| EBITDA-positive constellation builder | Adjusted EBITDA margin | Operating cash flow; constellation capex | Earnings exist, but depreciation keeps GAAP profit behind |
| Distressed multi-segment | Debt-adjusted enterprise value | Debt maturity schedule | A going-concern doubt outweighs the operating metrics |
What the full primer adds
The primer builds the tools in order: the three monetisation layers, the listed company types, the lifecycle from build to mature fleet, then backlog and deferred-revenue definitions and the capex a constellation demands. Two worked examples run from first input to enterprise value, a profitable LEO operator DCF and a pre-profit ramp with its runway check, before applied cases on Rocket Lab, Iridium, Viasat, EchoStar, Globalstar and Planet Labs. Screening closes with EV/sales bands, runway in years and government mix.
Free guides on the site cover the individual pieces, so you can revise one idea without reopening the PDF: space business models, government revenue share across space stocks, cash runway in pre-profit names, constellation capex economics, LEO vs GEO satellite economics, government contract backlog and EV/sales for space stocks. Research profiles for Rocket Lab, Iridium, Viasat, EchoStar, Globalstar and Planet Labs run the same screens on filed results. The companion Excel model spans twelve sheets, from a profitable-operator tab and a pre-profit builder through the runway, EV/sales and backlog screens to a live sensitivity grid, so swapping in your own name rebuilds the valuation from its stage up.
Sheets: Quick Start, Instructions, Assumptions, Profitable Operator, Pre-Profit Builder, Engine Mapper, Valuation Summary, Cash Runway & Capex, EV-Sales Screen, Backlog & Government Mix, Sensitivity, Dashboard.
Space stock valuation: free guides
Space stock valuation FAQ
- How do you value a space company?
- Decide its profitability stage first. A pre-profit launch or data company is screened on EV/sales with a cash-runway overlay and valued with a ramp DCF that capitalises a mature year at an exit multiple. A profitable satellite operator is valued on a ten-year free cash flow DCF, with EV/EBITDA and EV/sales as quick cross-checks.
- What is a normal EV/sales multiple for a space stock?
- The primer's bands are below 15x where revenue is already large or debt dominates, 15-35x with subscription or backlog visibility, 35-75x for high-growth launch or constellation builds, and above 75x where the market prices scale years ahead of filed revenue. Profitable LEO operators sit around 4-8x. Never rank names from different stages on one EV/sales column.
- How do you calculate cash runway for a pre-profit space company?
- Divide filed liquidity by the annual operating cash outflow, not by net loss, since depreciation and non-cash items can pull the two apart. Below 12 months points to dilution or refinancing within a year, and above 36 months is extended. Add constellation capex separately, because a satellite build needs capital even when operating runway looks long.
- What discount rate is used to value space companies?
- The primer uses 12.0% for pre-profit names, a 4.50% ten-year Treasury plus a 7.5% early-stage equity risk premium, and 9.5% for a profitable operator, where the premium is 5%. On a pre-profit ramp most of the value sits in the terminal, so the exit multiple and the mature margin matter as much as the rate.
- Why do pre-profit space stocks trade so far above their DCF value?
- EV/sales on a pre-profit name prices optionality: survival and scale years before the earnings exist. In the primer's worked ramp a 40x screen multiple is about 12 times what the cash flows support. Everything above the DCF is a bet on scale, and runway decides whether the company lives to collect it.
See this methodology applied to a real company:
Rocket Lab (RKLB) →