Rocket Lab: With A Rosy Outlook Ahead, I'm Waiting For A Discount To Buy

2025-01-27 22:30:26 ET

Summary

• Rocket Lab's impressive backlog growth and improving revenue quality explain the stock's rising growth expectations and multiple expansion.
• The Trump administration's pro-space stance is likely to lead to increased space funding, and Rocket Lab is well positioned and ready to service increased demand.
• Rocket Lab's Neutron rocket presents meaningful gross profit expansion opportunities as it provides a cost-competitive alternative to SpaceX's Falcon 9 in servicing the growing demand from low-earth orbit satellite launches.
• Despite a rich valuation with a 3-yr forward PE over 100x, on a EV/serviceable addressable market perspective, the stock trades more reasonably.
• The technicals are bullish but offer no discount entry for the buys. I would ideally like to see a correction, perhaps from a short-term execution hiccup to initiate buy positions.

A Way To Invest In The Space Theme

Rocket Lab ( RKLB ) does rocket science, but the business is not that hard to grasp for the investor who would be more concerned with commercial viability rather than the technical science:

The company provides launch services for satellites (a group of which is called a constellation) via 3 rockets capable of carrying different masses (called payloads):

Read the full article on Seeking Alpha

For further details see: