Rocket Lab Shares Fall After New Analyst Coverage And Valuation Concerns
Shares of Rocket Lab USA Inc. (NASDAQ:RKLB) are trading lower Monday following new analyst coverage and a reassessment of the stock’s valuation outlook.
What To Know: The drop comes after Craig-Hallum initiated coverage on the company with a Hold rating and a price target of $51, expressing caution around the current valuation and future execution risks.
Craig-Hallum acknowledged Rocket Lab's strong track record and recent momentum, highlighting its 778% gain over the past year and 64% increase in the last six months, but described the stock as "priced for perfection." The firm cited high expectations for the upcoming Neutron rocket platform, which is projected to have one, three and five launches in 2025, 2026 and 2027, respectively. The firm warned that historical precedent shows flawless execution in new rocket platforms is rare and that even small setbacks can result in extended delays.
The analyst report also highlighted competitive pressure from SpaceX, whose Falcon 9 currently dominates the market. Further competition is anticipated if SpaceX achieves full operational capability with its Starship vehicle, which could significantly alter the cost structure across the launch industry.
Rocket Lab is currently trading at 28 times estimated fiscal year 2026 revenue, a steep premium compared to the NewSpace sector average of 7 times revenue. While Craig-Hallum believes the premium is partially justified by Rocket Lab’s performance, it noted that a more favorable risk/reward entry point may emerge in the future.
Other firms remain optimistic about Rocket Lab's long-term outlook. Citi analyst Jason Gursky recently raised his price target from $33 to $50 and maintained a Buy rating, citing progress on the Neutron rocket and anticipated growth in the satellite systems segment. Cantor Fitzgerald also reiterated an Overweight rating with a $35 target following recent satellite launch successes.
Rocket Lab has continued to develop its infrastructure to support future launches. The company recently awarded a contract to Bollinger Shipyards to build a specialized ocean landing platform named “Return On Investment” for its reusable Neutron rocket. The vessel, expected to be delivered by early 2026, will serve as a critical component of Rocket Lab's reusable launch strategy.
Despite the company's continued progress in expanding launch and satellite capabilities, the recent stock decline reflects investor caution amid high valuation levels and the inherent risks tied to execution timelines in aerospace development. Rocket Lab is scheduled to report second-quarter earnings on Aug. 7 after market close, which may offer further insight into its operational trajectory.
RKLB Price Action: RocketLab shares were down 5.49% at $44.86 at the time of writing, according to Benzinga Pro.
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