Rocket Lab (NASDAQ:RKLB) Shares Climb 5.5% - Should You Buy?

Key Points

• Rocket Lab shares rose 5.5% in Wednesday mid-day trading to $66.15, with trading volume about 5% above its average.
• Business growth was strong: third-quarter revenue increased 73% year over year to $267.8 million, backlog rose to $3.57 billion, and fourth-quarter revenue guidance exceeded analysts’ expectations. However, the company posted a larger-than-expected loss, and its first Neutron launch is now expected no earlier than 2027.
• Analysts’ consensus rating is Moderate Buy, with an average price target of $99, though some firms recently reduced their targets.

Rocket Lab Corporation (NASDAQ:RKLB - Get Free Report) shares rose 5.5% during mid-day trading on Wednesday. The company traded as high as $68.26 and last traded at $66.15. 23,924,920 shares traded hands during mid-day trading, an increase of 5% from the average daily volume of 22,816,293 shares. The stock had previously closed at $62.71.

Key Rocket Lab News

These are some of the RKLB news items that stood out recently:

• Positive Sentiment: Growth and demand remain strong. Third-quarter revenue rose about 73% year over year to $267.8 million, topping estimates, while backlog increased 52% sequentially to $3.57 billion. Rocket Lab also guided to fourth-quarter revenue of $270 million–$290 million, above consensus. Article
• Neutral Sentiment: Technical commentary pointed to shares breaking above a resistance level, which may be encouraging short-term momentum traders, but does not change the company’s fundamentals. Article
• Negative Sentiment: Losses and execution remain key concerns. Rocket Lab’s roughly $80 million quarterly net loss was wider than expected, and the first Neutron launch is now expected no earlier than 2027. The delay puts more weight on successful development and schedule execution, while CEO Peter Beck also flagged critical-mineral availability as an industry challenge. Article

Wall Street Analysts Forecast Growth

A number of equities analysts have issued reports on RKLB shares. Morgan Stanley cut their price target on Rocket Lab from $105.00 to $103.00 and set an "overweight" rating for the company in a research note on Wednesday. Citizens Jmp lowered their price objective on Rocket Lab from $130.00 to $90.00 and set a "market outperform" rating for the company in a research note on Friday, October 16th. Citigroup restated a "market outperform" rating on shares of Rocket Lab in a report on Friday, October 16th. KeyCorp reaffirmed an "overweight" rating and set a $100.00 target price on shares of Rocket Lab in a research report on Tuesday. Finally, Weiss Ratings reiterated a "sell (d-)" rating on shares of Rocket Lab in a report on Thursday, October 15th. Three research analysts have rated the stock with a Strong Buy rating, fifteen have given a Buy rating, five have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $99.00.

Rocket Lab Stock Performance

The company's 50-day simple moving average is $62.42 and its 200 day simple moving average is $78.68. The stock has a market cap of $39.58 billion, a P/E ratio of -183.75 and a beta of 3.15. The company has a current ratio of 5.48, a quick ratio of 4.98 and a debt-to-equity ratio of 0.01.

Rocket Lab (NASDAQ:RKLB - Get Free Report) last released its earnings results on Monday, November 9th. The rocket manufacturer reported ($0.12) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.07) by ($0.05). The business had revenue of $267.83 million during the quarter, compared to the consensus estimate of $257.21 million. Rocket Lab had a negative net margin of 25.73% and a negative return on equity of 7.71%. As a group, sell-side analysts expect that Rocket Lab Corporation will post -0.20 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, Director Nina Armagno sold 10,926 shares of the stock in a transaction that occurred on Monday, November 2nd. The shares were sold at an average price of $52.78, for a total transaction of $576,674.28. Following the completion of the transaction, the director directly owned 100,496 shares of the company's stock, valued at $5,304,178.88. This represents a 9.81% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Frank Klein sold 35,558 shares of the firm's stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $66.61, for a total transaction of $2,368,518.38. Following the sale, the insider owned 925,737 shares of the company's stock, valued at approximately $61,663,341.57. The trade was a 3.70% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 551,832 shares of company stock valued at $34,940,037. Company insiders own 8.40% of the company's stock.

Institutional Trading of Rocket Lab

Several hedge funds have recently made changes to their positions in the company. Hilton Head Capital Partners LLC grew its stake in shares of Rocket Lab by 3,590.0% during the 3rd quarter. Hilton Head Capital Partners LLC now owns 369 shares of the rocket manufacturer's stock worth $26,000 after acquiring an additional 359 shares during the period. Meeder Asset Management Inc. bought a new stake in Rocket Lab in the 2nd quarter valued at about $30,000. Highland Investment Advisors LLC bought a new stake in Rocket Lab in the 2nd quarter valued at about $30,000. NBH Bank purchased a new stake in Rocket Lab during the second quarter valued at about $30,000. Finally, Cherry Tree Wealth Management LLC purchased a new stake in Rocket Lab during the second quarter valued at about $32,000. 71.78% of the stock is currently owned by institutional investors.

About Rocket Lab

Rocket Lab is a space company that provides launch services and spacecraft and satellite systems for commercial, civil, and national security customers. Founded in 2006 by Peter Beck, the company operates internationally, with headquarters in Long Beach, California, and launch operations in New Zealand and the United States. Its launch business centers on Electron, a small orbital rocket designed to carry satellites to space, and HASTE, a suborbital vehicle used for hypersonic test missions. Rocket Lab is also developing Neutron, a larger launch vehicle.

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