SpaceX (NASDAQ: SPCX) has captured significant media attention and investor interest since its initial public offering in recent months.
While any investor can now buy into Elon Musk’s company, its rich valuation and money-losing status should give pause to careful investors.
SpaceX is also a sprawling, difficult-to-analyze business spanning social media, rocket manufacturing and launching, broadband, and artificial intelligence.
Two publicly traded growth companies present themselves as stronger alternatives, offering profitability, expansion, and far more reasonable valuations.
Amazon (NASDAQ: AMZN) is widely known for its online retail operations and devices like Alexa, but its cloud computing division is where the real profit engine lives.
Amazon Web Services holds a 28% market share among the three largest cloud providers, ahead of Microsoft’s Azure and Alphabet’s Google Cloud, as of the first quarter.
AWS delivered second-quarter sales growth of 36.8% year over year, reaching $42.2 billion, while operating income surged 63.6% to $16.6 billion.
Amazon’s total revenue reached $200.6 billion in the quarter, reflecting 19.6% growth compared to the same period a year ago.
Investor concerns over capital expenditures, including a planned $220 billion this year, have pushed Amazon’s price-to-earnings ratio down to 22, below the S&P 500’s current P/E of 29.
The rapid adoption of generative artificial intelligence is expected to drive even greater demand for AWS data centers in the years ahead.
TJX Companies (NYSE: TJX) offers a compelling alternative as an off-price retailer with nearly five decades of proven business experience.
Its retail brands, including TJ Maxx, Marshalls, and HomeGoods, purchase merchandise from manufacturers and wholesalers at steep discounts and typically offer customers savings of 20% to 60% versus traditional retailers.
The business model tends to perform particularly well during economic stress, when wholesalers carry more excess inventory and TJX gains greater negotiating leverage.
TJX reported fiscal first-quarter same-store sales growth of 6% across all its brands, for the period ended May 2.
Diluted earnings per share jumped 29% to $1.19 during the same quarter, demonstrating that TJX is growing profits, not just revenue.
The company opened 129 new stores last year, added another 48 in the first quarter, and finished the period operating 5,262 locations globally.
TJX shares are up just 2.6% this year, underperforming the S&P 500’s 11% gain, which has compressed the stock’s P/E ratio from 34 to 31 and created a more attractive entry point.
Both Amazon and TJX offer investors a combination of consistent growth, profitability, and reasonable valuations that SpaceX currently cannot match.
