Rocket Lab: It's Actually Rocket Science

2025-02-28 21:42:03 ET

Summary

• Rocket Lab is poised for significant growth with 20+ launches in 2025, including the highly anticipated Neutron rocket, a cost-effective Falcon 9 competitor.
• Despite a 35% stock retracement, Street analysts maintain a buy rating with a $25.50 price target. The author anticipates a potential $40 stock price by year-end 2025.
• The Bleecker Street short report's claims are debunked; Rocket Lab's execution and demand for Neutron remain strong, with multiple contracts already secured.
• Financially overvalued now, Rocket Lab's future revenue streams, especially from Neutron, present a compelling long-term investment opportunity with profitability expected by 1H 2026.

Space stocks have been a wild ride over the past six months and that is no different than this upcoming rocket launcher - Rocket Lab (RKLB). This end to end space company provided 16 launches in 2024 - an increase of 60% from 2023. And from recent commentary on their most recent launch, and subsequent conferences, they have a manifest of over 20 launches scheduled for 2025. That includes Electron, Haste and not to mention, the newcomer on the scene, the Falcon 9 competitor, Neutron. Retail is keeping a close eye on the first Neutron launch, which is tentatively scheduled for no earlier than mid-year, and has held this timing for the past 3 quarters. Each $55m launch for Neutron is the equivalent of 6.5 Electron launches and will be a catalyst for getting Rocket Lab to $1bn in annual run rate by 2027.

Rockets are not the only service this company provides, as space systems revenue provided over 70% of the company’s topline over the trailing twelve months and the systems division is expected to grow nearly 80% year-on-year. Collectively, Launch and Space Systems have crossed the $100m per quarter threshold three times now, with the 4Q actuals print of $132m. I predicted revenue of $125m....

Read the full article on Seeking Alpha

For further details see: