Rocket Lab: Still A Buy Despite High Valuation

2025-05-09 11:42:45 ET

Summary

• Rocket Lab's Q1 results showed a revenue increase of 32.1% year-over-year but a sequential decline. Long-term growth remains promising with Neutron rocket developments and new contracts.
• Despite current losses due to Neutron investments, Q2 revenue is expected to grow 6-14% sequentially, driven by improved ASP and Space Systems output.
• The NSSL Phase 3 contract and Mynaric acquisition bolster Rocket Lab's position in defense and commercial markets, enhancing its end-to-end space service capabilities.
• Valuation is high, but long-term prospects justify a buy rating, with potential for significant upside by 2027-2028 despite risks of market sell-offs or project delays.

Rocket Lab USA ( RKLB ) posted its first quarter results on May 9, beating analyst estimates on the top and bottom line. The stock price declined slightly in post-market trading, which to me actually does not mean much especially since the stock price rose 29% since my last report . In that report, I discussed the importance of Rocket Lab being selected for the NSSL Phase 3 contract, enabling it to compete for launch services using its Neutron Rocket....

Read the full article on Seeking Alpha

For further details see: