Rocket Lab Is Playing a Much Bigger Game Than Rocket Launches

Quick Read

• RKLB’s $2.36B backlog supports a BUY rating and $68.07 price target despite shares falling 30% after Neutron’s launch was pushed to 2027.

• The Iridium (IRDM) acquisition brings Rocket Lab 66 satellites, over 2.5 million subscribers, and $870M in annual revenue, shifting it beyond launch services.

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Our 24/7 Wall St. price target for Rocket Lab (NASDAQ:RKLB) is $68.07 over the next 12 months. That is 35.06% above the current price of $50.40. Our model rates the stock a buy with moderate confidence.

The market is pricing Rocket Lab as a launch company with a delayed rocket. Rather, it is a defense-heavy space prime building out its own communications network.

Backlog reached $2.36B (+137% YoY), and the Iridium Communications (NASDAQ:IRDM) deal adds recurring service revenue. Dilution and Neutron execution are the reasons my confidence stops at 60%.

Neutron Delay Sparks a Sharp Sell-Off in Rocket Lab Shares

Shares are down 8.78% over the past week, 29.98% over the past month and 27.75% year to date. That leaves them 66.6% below the $151 52-week high.

On October 14, Rocket Lab pushed Neutron’s first launch to 2027 after finding a defect in its carbon-composite tank. That same week, investors began to worry about FCC scrutiny of the Iridium deal, even though Iridium stockholders approved the acquisition on September 24.

In Q2, revenue of $234.07M rose 62% and beat estimates. GAAP EPS of -$0.08 missed the -$0.0767 consensus, partly because of $8.58M in acquisition costs.

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Bulls See a Path Back to $102