Key Takeaways
- Rocket Lab stock fell 21.8% in the past week (through Monday’s close) after the company pushed Neutron’s first launch into 2027.
- Management has tied positive adjusted EBITDA to the quarter after Neutron’s first successful flight, so the delay pushes that turn to the second quarter of 2027 at the earliest.
- Most analysts kept their ratings but cut their targets: Citizens to $90 and Goldman Sachs to $67, while Needham held at $120.
- Third-quarter results in November are the next test, against guidance of $250 million to $265 million in revenue.
Rocket Lab (RKLB) stock is down 21.8% in the past week (through Monday’s close), after the company said its Neutron rocket won’t fly until 2027.
Tiny air pockets, a big delay
After Wednesday’s close, Rocket Lab moved Neutron’s first launch from its fourth-quarter 2026 target into 2027. It blamed tiny air pockets in a carbon fiber dome on the first-stage tank.
“They don’t necessarily mean that the dome would fail on flight, but our practice is to proceed only when we believe the system has the appropriate margins,” CEO Sir Peter Beck said in a (LINK NEEDED). “Possible success isn’t our standard.”
Investors saw it coming. Shares slid 7.8% during Wednesday’s session, before the news, then lost 6.6% Thursday and 8% Friday. Beck had warned in August that the window for a launch by year-end was “narrowing.”
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Neutron is the profit plan
CFO Adam Spice has tied positive adjusted EBITDA to the quarter after Neutron’s first successful flight. Consensus had that turn in early 2027, which assumed a flight around the end of this year. Now the second quarter of 2027 is the earliest it can come.
And the cash keeps going out: Rocket Lab burned $110.1 million of free cash flow in the second quarter, against about $2.4 billion of cash and investments.
Wall Street still expects revenue to more than double, from $602 million in 2025 to $1.33 billion in 2027.
Citizens cut its target to $90 from $130 on Friday, and it says the delay hits 2027 and 2028 launch revenue hardest. I’d expect those estimates to come down.
Still pricier than usual
Most of the Street cut its targets but kept its Buy ratings. Goldman Sachs went to $67 and stayed at Neutral, while Needham held its Buy rating and $120 target. The consensus target is near $102, roughly double where the stock trades now.
The multiple hasn’t fallen as far as the price. At about 27x forward sales on Friday, Rocket Lab is well below the 35.5x of Oct. 8 and the 89.2x of its May peak…
…but it’s still above its five-year average of about 21x, and that’s before any estimate cuts.
Third-quarter results should come in early-to-mid November, against guidance of $250 million to $265 million in revenue. A firmer date for Neutron matters more.
My take: Rocket Lab isn’t a bargain yet, and I’d wait for that report before buying. Of course, a clean test of the rebuilt dome could bring buyers back in a hurry.
So what is Rocket Lab stock actually worth?
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