Rocket Lab (NASDAQ:RKLB) Trading 1.6% Higher - Here's Why

Key Points

• Rocket Lab rose 1.6% to $63.55 after securing financing for its planned Iridium acquisition. The company completed a $1.944 billion stock offering and canceled a costly $3.6 billion bridge facility.
• The Iridium deal is expected to roughly double Rocket Lab’s business, expanding its satellite-services exposure and adding a cash-generative communications operation.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and $107.32 price target, though Rocket Lab recently missed quarterly EPS estimates and continues to report negative margins.

Rocket Lab Corporation (NASDAQ:RKLB - Get Free Report) rose 1.6% on Tuesday . The company traded as high as $65.72 and last traded at $63.55. 20,236,536 shares changed hands during mid-day trading, a decline of 13% from the average session volume of 23,146,479 shares. The stock had previously closed at $62.55.

Key Rocket Lab News

Here are the key news stories impacting Rocket Lab this week:

• Positive Sentiment: Acquisition financing is now secured. Rocket Lab completed a $1.944 billion at-the-market stock offering, issuing approximately 29.3 million shares. Combined with existing liquidity and Iridium’s debt, the proceeds are intended to cover the cash consideration and related transaction costs. Rocket Lab Fully Funds Iridium Acquisition
• Positive Sentiment: Rocket Lab eliminated a major financing risk. The company terminated its previously arranged $3.6 billion senior secured bridge facility, while Iridium amended its existing $1.775 billion term-loan facility to permit the change of control. Management characterized the revised structure as lower-cost, permanent financing supported by Iridium’s free cash flow. Rocket Lab Secures Funding for Iridium Buyout
• Positive Sentiment: The deal could substantially expand Rocket Lab’s business. The company expects Iridium to roughly double its size, strengthening its satellite-services exposure and adding a cash-generative communications business. The financing announcement helped ease concerns that the acquisition might not be fully funded. Rocket Lab Raises Funds for Iridium Acquisition

Wall Street Analysts Forecast Growth

RKLB has been the subject of a number of research analyst reports. Wall Street Zen downgraded Rocket Lab from a "hold" rating to a "sell" rating in a research report on Saturday, August 15th. Cantor Fitzgerald upped their price objective on shares of Rocket Lab from $96.00 to $122.00 and gave the stock an "overweight" rating in a research report on Tuesday, August 11th. Citigroup reaffirmed a "market outperform" rating on shares of Rocket Lab in a research note on Tuesday, July 28th. Stifel Nicolaus set a $132.00 target price on shares of Rocket Lab in a research report on Thursday, June 4th. Finally, Piper Sandler initiated coverage on shares of Rocket Lab in a report on Wednesday, July 15th. They issued a "neutral" rating and a $83.00 price target on the stock. Four investment analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, Rocket Lab has a consensus rating of "Moderate Buy" and a consensus target price of $107.32.

Rocket Lab Stock Performance

The company has a debt-to-equity ratio of 0.01, a current ratio of 5.48 and a quick ratio of 4.98. The company has a 50 day simple moving average of $70.97 and a 200-day simple moving average of $84.50. The stock has a market cap of $38.03 billion, a P/E ratio of -235.36 and a beta of 2.60.

Rocket Lab (NASDAQ:RKLB - Get Free Report) last posted its quarterly earnings data on Monday, August 10th. The rocket manufacturer reported ($0.08) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.06) by ($0.02). The firm had revenue of $234.07 million during the quarter, compared to analysts' expectations of $231.62 million. Rocket Lab had a negative return on equity of 6.48% and a negative net margin of 21.51%. On average, equities analysts expect that Rocket Lab Corporation will post -0.2 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Rocket Lab news, CAO Agostino Ricupati sold 669 shares of Rocket Lab stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $69.63, for a total transaction of $46,582.47. Following the transaction, the chief accounting officer directly owned 26,863 shares of the company's stock, valued at approximately $1,870,470.69. This trade represents a 2.43% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Marvin Clevenger sold 15,051 shares of the business's stock in a transaction that occurred on Monday, August 24th. The stock was sold at an average price of $69.63, for a total transaction of $1,048,001.13. Following the completion of the sale, the insider owned 458,924 shares of the company's stock, valued at approximately $31,954,878.12. The trade was a 3.18% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 3,624,371 shares of company stock valued at $312,944,881 over the last 90 days. Company insiders own 8.40% of the company's stock.

Hedge Funds Weigh In On Rocket Lab

Institutional investors and hedge funds have recently made changes to their positions in the business. BlackRock Inc. purchased a new position in Rocket Lab during the 2nd quarter valued at about $4,124,970,000. Bank of New York Mellon Corp purchased a new stake in Rocket Lab in the second quarter worth about $245,764,000. Norges Bank purchased a new stake in Rocket Lab in the fourth quarter worth about $341,036,000. Bank of America Corp DE bought a new position in shares of Rocket Lab during the second quarter valued at approximately $437,280,000. Finally, Capital World Investors increased its stake in shares of Rocket Lab by 12.0% during the fourth quarter. Capital World Investors now owns 16,200,726 shares of the rocket manufacturer's stock valued at $1,130,172,000 after purchasing an additional 1,738,623 shares in the last quarter. Institutional investors own 71.78% of the company's stock.

Rocket Lab Company Profile

Rocket Lab USA, Inc is a space company that provides launch services and space systems for commercial, civil and national security customers. The company develops and operates launch vehicles, spacecraft and satellite components, with activities spanning the design, manufacture and operation of space hardware.

Rocket Lab's Electron rocket is a small-lift orbital launch vehicle designed to deploy small satellites. The company also develops HASTE, a suborbital test vehicle based on Electron technology, and is developing Neutron, a larger reusable launch vehicle intended to support a broader range of missions.

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