Key Takeaways
- Piper Sandler kept its Neutral rating on Rocket Lab and cut its price target to $58 from $83. That target is 13% below the stock’s price.
- Piper says Neutron’s launch timing matters more to the stock right now than anything else, and the rocket still has no launch date.
- Analysts expect 3 cents a share of normalized earnings in 2027, down from 16 cents a year ago, even though the backlog hit a record $3.57 billion.
- Piper’s cut fits the numbers until Rocket Lab names a Neutron launch date.
Rocket Lab (RKLB) just reported record revenue and a record backlog. Piper Sandler still cut its price target 30% on Nov. 10, to $58 from $83, and kept its Neutral rating. That’s 13% below the stock’s $66.29, and the shares are already 56% below their late-May high.
Neutron still has no date
Third-quarter revenue rose 73% to a record $268 million, and backlog reached $3.57 billion, up 52% since the end of June. But Rocket Lab lost 12 cents a share, against the 7 cents analysts expected.
Neutron’s first launch is now targeted for no earlier than 2027. CEO Peter Beck again gave no launch date on the call. He said there won’t be one until the rocket’s first-stage tank passes all its tests.
Piper wants a Neutron date first
Analyst Alexander Potter called the quarter reasonably solid and said launch demand and prices are rising. But for Potter, Neutron’s timing is the only near-term metric that matters, and until investors know when the rocket will fly reliably, he expects the stock to struggle. Most of the cut came from lower valuation multiples across space stocks.
The Street’s average target has slipped from $117 in July to $102:
Piper’s $58 is now the lowest target on the Street and 43% below that average. The average itself is 54% above the stock.
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
The estimates are still falling
Analysts expect Rocket Lab to roughly break even on a normalized basis next year and to start earning real money in 2028:
A year ago, the 2027 consensus was 16 cents a share. Now it’s 3 cents. Management ties positive adjusted EBITDA to the quarter after Neutron’s first successful flight, so analysts push earnings out with every delay.
With earnings that thin, I look at sales instead. Rocket Lab traded at 36.1x forward sales at the end of September, well above its 22.5x quarter-end average since 2021, so there’s room for that multiple to fall further.
Wait for the launch date
Piper could be early. Rocket Lab held about $4.7 billion of cash and securities at Sept. 30, and its fourth-quarter revenue guidance came in above what analysts expected. A firm Neutron date could lift the stock quickly.
Still, Piper’s cut fits the numbers. I’d stay on the sidelines with Piper until Rocket Lab names a Neutron date. The tank’s tests and fourth-quarter results in early 2027 are the next chances for one.
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!
