Rocket Lab said it is buying Iridium as a “shortcut” to expanding its growing capabilities.
The commercial space industry is entering a new phase.
Rocket Lab (NASDAQ: RKLB) stock price has suffered a major reversal in the past few weeks, moving from the year-to-date high of $151 on May 27 to $84. This retreat continued even after the company landed a new NASA contract last week.
Rocket Lab faces delayed profitability due to negative incremental margins driven by vertical integration initiatives and high early unit costs for Neutron. Rate hike probabilities have increased over the upcoming quarter, posing a significant multiple compression headwind for RKLB, exacerbated by its very negative FCF profile. RKLB needs a 30% 15-year revenue CAGR to justify its current valuations and earn a mere market-level return. Hardly any companies have grown at this rate for so long.
Rocket Lab Corp (NASDAQ:RKLB) is trading 1.5% higher at $81.91 before the bell today, after NASA selected the company to provide three Electron launches, including the PolSIR and TSIS-2 missions.
Shares of Rocket Lab (NASDAQ: RKLB) climbed in premarket trading after the space company announced that NASA had selected its Electron launch vehicle for two Earth and solar science missions. The missions, known as Polarized Submillimeter Ice-cloud Radiometer Satellite (PolSIR) and Total and Spectral Solar Irradiance Sensor-2 (TSIS-2), will launch from Rocket Lab's Launch Complex 1 in Mahia, New Zealand.
RKLB is expanding its national security space footprint through launch services, spacecraft technologies and mission systems for government customers.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price.
The SpaceX IPO removed Rocket Lab's scarcity premium but left revenue growth, backlog expansion, and Neutron milestones intact. Rocket Lab's opportunity lies in becoming the second strategic launch provider rather than directly competing against SpaceX. Growing defense programs, sovereign initiatives, and satellite constellations could expand demand beyond current industry supply capacity.
In the most recent trading session, Rocket Lab Corporation (RKLB) closed at $85.41, indicating a -10.21% shift from the previous trading day.
The space industry is in the middle of a transformation.
Rocket Lab stock price has slipped in the past few weeks as investors book profits following the spectacular rally that happened before the SpaceX IPO. RKLB dropped to the key support level of $100, even after it entered the exclusive Nasdaq 100 Index.