Should You Buy, Hold or Sell Rocket Lab Stock Ahead of Q4 Earnings?

Core Viewpoint - Rocket Lab USA, Inc. is expected to report its fourth-quarter 2024 results on February 27, 2025, with significant revenue growth anticipated but challenges in profitability due to high operating expenses [1][19]. Revenue Estimates - The Zacks Consensus Estimate for Rocket Lab's revenues is $129.9 million, reflecting a 116.6% increase from the same quarter last year [2]. - The Launch Services segment is projected to generate revenues of $37.5 million, indicating a substantial 343.3% increase year-over-year [9]. - The Space Systems segment is expected to report revenues of $92.37 million, representing a 79.3% growth compared to the previous year [10]. Earnings Projections - The consensus estimate for the bottom line is a loss of 10 cents per share, unchanged from the prior-year quarter [2]. - Rocket Lab has a history of earnings surprises, beating estimates in three of the last four quarters with an average surprise of 9.04% [3]. Operating Expenses and Profitability - Higher operating expenses, driven by increased staff costs and IT infrastructure spending, may negatively impact operating margins and overall earnings [11]. - The company anticipates continued increases in operating expenses, which could hinder profitability if revenue growth does not keep pace [18]. Stock Performance and Valuation - Rocket Lab's stock has increased by 330.5% over the past year, outperforming the aerospace-defense industry, which declined by 5.9% [12]. - The forward 12-month price-to-sales (P/S) ratio for Rocket Lab is 16.31X, significantly higher than the industry average of 1.58X, indicating a premium valuation [13]. Industry Outlook - The global space economy is projected to reach $1.8 trillion by 2035, presenting growth opportunities for Rocket Lab, particularly with its Electron rocket being the second most frequently launched orbital rocket among U.S. companies [16].