Key Takeaways
- Morgan Stanley cut its Rocket Lab price target to $103 from $105 on Nov. 11 and kept its Overweight rating, 56% above the stock’s Nov. 11 close of $66.15.
- Rocket Lab sits 56% below its May high; it sold about $2.4 billion of stock in the third quarter and pushed Neutron’s first launch into 2027.
- The $103 target is close to the Street’s $102 average, but analysts now expect only 3 cents of normalized EPS for 2027, down from 16 cents a year ago.
- Demand looks strong, but $103 would mean paying close to the 62x forward sales Rocket Lab traded at in June, so the target looks early until earnings estimates stop falling.
Rocket Lab (RKLB) has fallen 56% from its May high, and Morgan Stanley still sees it climbing 56%. On Nov. 11, analyst Kristine Liwag trimmed her price target to $103 from $105 and kept her Overweight rating. Shares rose 5.5% that day to $66.15, ending a 44% rebound over four sessions.
A late rocket and a lot of new stock
Rocket Lab sold about $2.4 billion of stock in the third quarter to pay for its pending purchase of Iridium Communications. Its weighted share count reached 652 million, up from 529 million a year earlier. Then on Oct. 14, it pushed Neutron’s first launch into 2027.
The Nov. 9 report brought record revenue of $268 million, up 73%. But the GAAP loss was 12 cents a share, wider than the 7 cents analysts expected, partly because of one-time Iridium deal costs and a loss on retiring convertible debt.
Morgan Stanley has barely budged
Liwag upgraded the stock on Jan. 16, raising her target to $105 from $67. She called Rocket Lab a “strategically-important, multi-faceted space company with credible long-term growth optionality.” Her target is still only $2 below January’s.
Demand does back her up: backlog hit $3.57 billion at the end of September, up 52% from June. Her Nov. 11 note, as TipRanks reported it, also points to pricing. Several new Neutron contracts carry a $70 million base price, above the earlier $50 million to $55 million range. Her valuation counts the new shares but leaves out any Iridium earnings.
TIKR tracks 22 analysts on Rocket Lab. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Rocket Lab, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Rocket Lab’s Analyst Ratings
Is $103 just June’s price again?
Morgan Stanley’s $103 is almost exactly the Street’s $102 average target. That average is about 12% below its July peak of $117, a much smaller drop than the stock’s.
Earnings estimates have fallen much further. Analysts now expect 3 cents of normalized EPS in 2027, down from 16 cents a year ago.
CFO Adam Spice expects Neutron spending to stay elevated through first launch, and Liwag flagged the same cost, so those estimates have little room to rise soon.
At the end of September, Rocket Lab traded at 36x forward sales, against a five-year average of 21x. At the end of June, when it closed at $101.65, it traded at 62x. With 2027 sales estimates barely moved since then and more shares out, a $103 stock price would mean paying close to that June multiple again.
The estimates need to turn first
The Iridium deal adds dilution risk. Iridium holders get $27 in cash plus Rocket Lab stock for each share. If Rocket Lab averages $67.50 or less heading into the close, they get the most Rocket Lab shares the deal allows. The stock closed at $66.15 on Nov. 11, just under that line, and the deal is targeted to close in mid-2027.
Liwag is right about the demand, but those estimates need to stop falling before a 56% climb looks earned. The fourth-quarter report early in 2027 should show whether they’ve found a floor. It should also show whether Neutron’s first-stage tank is on track to finish qualifying in the first quarter, which Rocket Lab says must happen before it sets a launch date.
So what is Rocket Lab stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
