Atom laser experiments with Bose-Einstein condensates (BECs) performed in ground-based laboratories feature a coherent and directed beam of atoms which is accelerated by gravity. In microgravity the situation is fundamentally different because the dynamics is entirely determined by the repulsive interaction between the atoms and not by the gravitational force. As a result, the output of a space atom laser is a spherical wave slowly expanding away from the initial BEC. We present a thorough theoretical study of this new source of matter waves based on rf outcoupling which exhibits an isotropic distribution both in position and momentum even for an initially anisotropic trap. The unique geometry of such a freely expanding, shell-shaped BEC offers new possibilities for matter waves in microgravity and is complementary to other matter-wave sources prepared by delta-kick collimation or adiabatic expansion. Our work paves the way for the upcoming experimental realization of a space atom laser making use of NASA's Cold Atom Laboratory on the International Space Station.