Rocket Lab (NASDAQ:RKLB) Shares Gap Up - Here's Why

Key Points

• Rocket Lab shares gapped up premarket, opening at $73.03 versus a prior close of $70.12 and last trading near $70.70 on ~10.34 million shares, giving the company a market cap around $39.5 billion.
• Analysts are mixed but the consensus is a "Moderate Buy" with a consensus price target of $61.25, notably below the recent trading price, while individual firms have both raised (KeyCorp to $75) and cut ratings.
• The company reported strong revenue growth (up 48% YoY) and beat quarterly EPS estimates despite remaining unprofitable (negative margins and ROE); insiders have sold materially (2.73M shares worth ~$151.8M over 90 days) while institutions own ~71.8% of the stock.

Rocket Lab Corporation (NASDAQ:RKLB - Get Free Report) shares gapped up prior to trading on Tuesday . The stock had previously closed at $70.12, but opened at $73.03. Rocket Lab shares last traded at $70.7040, with a volume of 10,341,287 shares trading hands.

Analyst Upgrades and Downgrades

Several brokerages recently weighed in on RKLB. Citigroup reaffirmed a "market perform" rating on shares of Rocket Lab in a research report on Wednesday, November 12th. Wall Street Zen lowered Rocket Lab from a "hold" rating to a "sell" rating in a research note on Saturday, December 13th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Rocket Lab in a report on Wednesday, October 8th. KeyCorp raised their price target on shares of Rocket Lab from $50.00 to $75.00 and gave the company an "overweight" rating in a report on Friday, October 17th. Finally, Morgan Stanley reduced their price target on shares of Rocket Lab from $68.00 to $67.00 and set an "equal weight" rating on the stock in a research report on Wednesday, November 12th. Two investment analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, Rocket Lab presently has a consensus rating of "Moderate Buy" and a consensus price target of $61.25.

Rocket Lab Stock Performance

The firm has a market capitalization of $39.50 billion, a price-to-earnings ratio of -195.24 and a beta of 2.20. The company has a debt-to-equity ratio of 0.32, a quick ratio of 2.83 and a current ratio of 3.18. The stock's fifty day moving average is $55.41 and its two-hundred day moving average is $49.32.

Rocket Lab (NASDAQ:RKLB - Get Free Report) last posted its quarterly earnings data on Monday, November 10th. The rocket manufacturer reported ($0.03) earnings per share for the quarter, beating analysts' consensus estimates of ($0.05) by $0.02. Rocket Lab had a negative net margin of 35.64% and a negative return on equity of 27.26%. The company had revenue of $155.08 million during the quarter, compared to analysts' expectations of $152.45 million. During the same period in the prior year, the company posted ($0.10) EPS. The firm's revenue for the quarter was up 48.0% on a year-over-year basis. Analysts forecast that Rocket Lab Corporation will post -0.38 earnings per share for the current year.

Insider Buying and Selling

In other news, Director Nina Armagno sold 27,314 shares of the stock in a transaction that occurred on Friday, December 19th. The stock was sold at an average price of $68.21, for a total transaction of $1,863,087.94. Following the completion of the transaction, the director directly owned 108,940 shares in the company, valued at approximately $7,430,797.40. This represents a 20.05% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. Also, insider Frank Klein sold 41,782 shares of Rocket Lab stock in a transaction on Monday, November 24th. The stock was sold at an average price of $40.65, for a total transaction of $1,698,438.30. Following the completion of the sale, the insider owned 1,274,223 shares of the company's stock, valued at approximately $51,797,164.95. This trade represents a 3.17% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 2,729,485 shares of company stock worth $151,832,870 over the last 90 days. 11.90% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Rocket Lab

A number of institutional investors have recently modified their holdings of the stock. Vanguard Group Inc. raised its stake in Rocket Lab by 5.4% during the third quarter. Vanguard Group Inc. now owns 41,809,723 shares of the rocket manufacturer's stock valued at $2,003,104,000 after buying an additional 2,127,565 shares in the last quarter. Capital World Investors increased its holdings in shares of Rocket Lab by 9.4% in the 3rd quarter. Capital World Investors now owns 14,462,103 shares of the rocket manufacturer's stock valued at $692,879,000 after acquiring an additional 1,242,547 shares during the last quarter. State Street Corp increased its holdings in shares of Rocket Lab by 13.6% in the 3rd quarter. State Street Corp now owns 12,399,571 shares of the rocket manufacturer's stock valued at $594,063,000 after acquiring an additional 1,487,237 shares during the last quarter. Baillie Gifford & Co. raised its position in shares of Rocket Lab by 176.1% during the 3rd quarter. Baillie Gifford & Co. now owns 12,125,910 shares of the rocket manufacturer's stock valued at $580,952,000 after acquiring an additional 7,734,788 shares in the last quarter. Finally, Invesco Ltd. lifted its stake in Rocket Lab by 67.0% during the second quarter. Invesco Ltd. now owns 6,242,304 shares of the rocket manufacturer's stock worth $223,287,000 after purchasing an additional 2,504,054 shares during the last quarter. Institutional investors and hedge funds own 71.78% of the company's stock.

Rocket Lab Company Profile

Rocket Lab is an aerospace company that provides launch services, spacecraft, and space systems for commercial and government customers. The company's primary launch vehicle is Electron, a small-lift orbital rocket designed to deploy small satellites and rideshare payloads to low Earth orbit. Rocket Lab also develops and manufactures the Rutherford engine, noted for its electric-pump-fed design and additive-manufactured components, which powers Electron and supports the company's propulsion capabilities.

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