Investing.com -- CFRA analyst Keith Snyder on Friday initiated coverage of SpaceX with an unusual Sell rating and a $115 price target, below the company’s IPO price of $135 and the stock’s opening price of $150.

The Sell rating reflects concerns about the company’s ambitious growth strategy, high valuation expectations, and substantial capital requirements. CFRA said SpaceX must execute successfully across multiple emerging markets while the stock already reflects substantial long-term optimism.

"While SpaceX has built one of the most impressive technology platforms in the world, we believe the current investment case requires investors to underwrite several difficult outcomes at the same time," Snyder wrote in a Friday note.

The firm’s primary concern centers on SpaceX’s dependence on Starship, which is still moving from development toward commercial operations. Starship is expected to enable lower launch costs, next-generation Starlink satellite deployment, satellite-to-mobile expansion, orbital AI compute, lunar infrastructure, and eventual Mars transportation.

"This creates a significant execution bottleneck, as delays or technical setbacks in Starship could ripple across nearly every major growth initiative," the analyst said.

CFRA also expressed concern about the company’s capital intensity and free cash flow profile. SpaceX is investing across launch infrastructure, Starship development, Starlink satellites, user terminals, ground infrastructure, AI data centers, and future orbital AI infrastructure.

The firm said Starlink’s subscriber average revenue per user has declined as the company expands into lower-priced international markets and introduces more affordable plans. The business could face pressure from market saturation, regulatory limitations, network capacity constraints, and competition from terrestrial broadband and other satellite constellations, according to the report.

The AI segment introduces another major source of uncertainty, CFRA said. SpaceX is positioning xAI, Grok, X, COLOSSUS, COLOSSUS II, and future orbital AI compute as central components of its long-term growth strategy, but the business remains early stage and investment-heavy.

"We believe investors should be cautious about assigning substantial value to this segment before there is more evidence of sustainable revenue growth, competitive differentiation, and margin improvement," Snyder wrote.

The $115 price target implies a total value of $1.5 trillion, or 20.2 times CFRA’s 2027 sales estimate. This is in line with Anthropic’s valuation following its latest funding round.

Several other analysts initiated coverage of the company with bullish ratings. Wolfe Research started coverage at Outperform on Thursday, while New Street Research gave SPCX a $165 price target. Oppenheimer began coverage at Outperform with a $190 price target. KGI Securities also rates the stock as Outperform.

SpaceX shares rallied over 30% to $175 on Friday following its stellar Nasdaq debut. The company priced its offering on Thursday selling 555.56 million shares at $135 per share, valuing the rocket and spacecraft manufacturer at $1.77 trillion.

The IPO made Elon Musk, SpaceX’s founder and CEO, the world’s first trillionaire.