Rich Smith, The Motley Fool
5 min read
From a share price just under $65 at the end of July to an intraday high north of $86 mid-month to… just over $64 at the end of August, Rocket Lab (NASDAQ: RKLB) stock went full circle last month. Eventually, the stock ended up not just back where it started but actually a bit below. Investors seem to have cooled to the idea that Rocket Lab might become “the next SpaceX.”
Meanwhile, Space Exploration Technologies (NASDAQ: SPCX) stock is up 30% in August.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Should you ignore Rocket Lab?
Why do investors seem to be ignoring Rocket Lab? Why are they flocking to SpaceX stock instead — and are they right to do so? Because it’s not as if Rocket Lab has been reporting bad news lately.
On Aug. 20, Rocket Lab announced its 93rd successful Electron rocket launch, delivering an Earth-imaging satellite to orbit for longtime customer Institute for Q-shu Pioneers of Space. (iQPS). With 14 launches so far this year, Rocket Lab’s on pace to at least match last year’s record of 21 launches by the end of this year — and possibly surpass it.
On Aug. 18, the U.S. Space Force picked Rocket Lab to join its Space Data Network Consortium, awarding the company $12 million to work on the Space Data Network Backbone (SDN-B), a “secure, high-speed global satellite communications network for military operations.”
Just one day earlier, on Aug. 17, Space Force also drafted Rocket Lab to work on its NITE-STAR program, a $981 million umbrella contract “to support a distributed test and training architecture to help prepare [Space Force officers] for contested scenarios.”
And of course, there’s the transformative deal Rocket Lab announced in June. Buying Iridium Communications (NASDAQ: IRDM) for $8 billion — just 20% of its own market capitalization — Rocket Lab immediately straightened its path to profitability, and prepared to leapfrog other unprofitable space stocks to become both generally accepted accounting principles (GAAP) profitable and free cash flow positive as early as next year.
With successes like these, why would anyone prefer to own SpaceX?
Why you might prefer to own SpaceX over Rocket Lab
Not to put too fine a point on it, but the primary reason investors might prefer SpaceX stock over Rocket Lab is that SpaceX is light-years ahead of Rocket Lab (and everyone else) in space tech.
