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Who will take off to Mars first – SpaceX or Boeing?

Boeing (BA) CEO Dennis Muilenburg’s statement last week at an interview that his company would be the first to reach Mars, and SpaceX CEO Elon Musk’s response tweet “Do it” had gained limelight last week. Of course, the chief executives will be vouching for their own companies, but from an unbiased perspective, who is in […]

June 10, 2018 2 min read
Market News

Boeing (BA) CEO Dennis Muilenburg’s statement last week at an interview that his company would be the first to reach Mars, and SpaceX CEO Elon Musk’s response tweet “Do it” had gained limelight last week. Of course, the chief executives will be vouching for their own companies, but from an unbiased perspective, who is in […]

· June 10, 2018

Boeing (BA) CEO Dennis Muilenburg’s statement last week at an interview that his company would be the first to reach Mars, and SpaceX CEO Elon Musk’s response tweet “Do it” had gained limelight last week. Of course, the chief executives will be vouching for their own companies, but from an unbiased perspective, who is in a better position to achieve this feat?

SpaceX’s biggest advantage is Elon Musk, who is exceedingly good at convincing people about his plans. The company, valued at around $28 billion, took only seven years to build the world’s first commercial rocket that can carry as much as 140,000 pounds of cargo, the Falcon Heavy, and launched it earlier this year. Musk had also stated that the company would be able to reuse two of its three boosters that landed on the ground. This is an astounding feat.

Apart from this, SpaceX is also the first company to propel two rockets, with both of them landing within just 48 hours.

SpaceX’s biggest rival is a JV between defense contractor Lockheed Martin (LMT) and Boeing – United Launch Alliance – which is seven times former’s size with a market cap of $210.06 billion.  Though United Launch’s report card is not as eventful as SpaceX’s, the fact that it has the backing of defense company Lockheed Martin gives it an upper hand.  It is also NASA’s primary contractor for its Space Launch System rocket.

Apart from this, what gives Boeing a slight advantage is Elon Musk’s habit of failing to fulfill expectations with regards to Tesla’s (TSLA) deliveries. Also, space travel is a field that requires massive cash reserves, something that is not often associated with Musk. On the other hand, Boeing boasts of $8.5 billion in levered free cash flow, enough to fund R&D and future launches.

In the retrospect of these aspects, it may be safe to assume that Boeing may have an upper hand in reaching the Red Planet first. But we are not writing off SpaceX either; its progress so far has earned our respect.

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