Rocket Lab (NASDAQ:RKLB) Stock Price Down 7.4% - Should You Sell?

Key Points

• Rocket Lab shares were down 7.4%, trading around $74 midday (from a prior close of $80.07) on ~18.1M shares, about 31% below average daily volume.
• Several analysts raised targets (Bank of America to $120, Morgan Stanley to $105), and the consensus rating is a Moderate Buy with an average target price of $72.92.
• Insiders have been heavy sellers recently — the CFO sold 1.365M shares and insiders sold 4.306M shares (~$271.9M) over the last three months, though insiders still own 11.9% of the stock.

Rocket Lab Corporation (NASDAQ:RKLB - Get Free Report) was down 7.4% during mid-day trading on Monday . The stock traded as low as $73.88 and last traded at $74.15. Approximately 18,137,319 shares traded hands during mid-day trading, a decline of 31% from the average daily volume of 26,124,957 shares. The stock had previously closed at $80.07.

Wall Street Analysts Forecast Growth

A number of research firms have commented on RKLB. Needham & Company LLC upped their price target on Rocket Lab from $63.00 to $90.00 and gave the company a "buy" rating in a research report on Tuesday, December 23rd. Bank of America upped their target price on Rocket Lab from $60.00 to $120.00 and gave the company a "buy" rating in a report on Tuesday, January 20th. The Goldman Sachs Group raised their price target on Rocket Lab from $47.00 to $69.00 and gave the stock a "neutral" rating in a research note on Tuesday, January 20th. Morgan Stanley upgraded shares of Rocket Lab from an "equal weight" rating to an "overweight" rating and lifted their price target for the company from $67.00 to $105.00 in a report on Friday, January 16th. Finally, Citigroup restated a "market perform" rating on shares of Rocket Lab in a report on Wednesday, November 12th. Two analysts have rated the stock with a Strong Buy rating, seven have issued a Buy rating, five have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, Rocket Lab currently has an average rating of "Moderate Buy" and an average target price of $72.92.

Rocket Lab Stock Down 7.4%

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 50-day moving average price is $69.91 and its two-hundred day moving average price is $57.67. The stock has a market capitalization of $39.61 billion, a PE ratio of -195.13 and a beta of 2.16.

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

Insider Activity

In other news, insider Frank Klein sold 100,000 shares of the company's stock in a transaction dated Friday, January 2nd. The shares were sold at an average price of $72.95, for a total transaction of $7,295,000.00. Following the completion of the sale, the insider owned 1,169,487 shares of the company's stock, valued at $85,314,076.65. This represents a 7.88% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CFO Adam C. Spice sold 1,365,665 shares of the stock in a transaction that occurred on Monday, January 5th. The stock was sold at an average price of $75.50, for a total transaction of $103,107,707.50. Following the completion of the transaction, the chief financial officer owned 1,359,568 shares in the company, valued at $102,647,384. This trade represents a 50.11% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 4,306,150 shares of company stock valued at $271,865,732 over the last three months. Corporate insiders own 11.90% of the company's stock.

Institutional Trading of Rocket Lab

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Sara Bay Financial grew its position in shares of Rocket Lab by 0.7% during the 4th quarter. Sara Bay Financial now owns 15,905 shares of the rocket manufacturer's stock valued at $1,121,000 after acquiring an additional 117 shares during the period. ORG Partners LLC lifted its position in Rocket Lab by 9.1% during the fourth quarter. ORG Partners LLC now owns 1,458 shares of the rocket manufacturer's stock valued at $102,000 after purchasing an additional 121 shares in the last quarter. Traynor Capital Management Inc. grew its holdings in Rocket Lab by 1.9% during the fourth quarter. Traynor Capital Management Inc. now owns 7,191 shares of the rocket manufacturer's stock valued at $502,000 after purchasing an additional 133 shares during the period. Capital Advisors Wealth Management LLC increased its position in Rocket Lab by 1.0% in the fourth quarter. Capital Advisors Wealth Management LLC now owns 13,466 shares of the rocket manufacturer's stock worth $939,000 after buying an additional 136 shares in the last quarter. Finally, Quadcap Wealth Management LLC raised its stake in shares of Rocket Lab by 2.3% in the fourth quarter. Quadcap Wealth Management LLC now owns 6,246 shares of the rocket manufacturer's stock worth $436,000 after buying an additional 140 shares during the period. 71.78% of the stock is owned by hedge funds and other institutional investors.

About Rocket Lab

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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