Should You Buy, Hold or Sell Rocket Lab Stock Ahead of Q2 Earnings?

Core Viewpoint - Rocket Lab USA, Inc. is expected to report second-quarter 2025 results on August 7, 2025, with projected revenues of $135.1 million, reflecting a 27.1% year-over-year increase, and an estimated loss of seven cents per share, an improvement from the previous year's loss of eight cents [1][6]. Revenue Projections - The Zacks Consensus Estimate for Rocket Lab's revenues is $135.1 million for Q2, indicating a 27.1% increase from the same quarter last year [1][6]. - The Launch Services Unit is projected to generate revenues of $39.5 million, a 34.5% increase year-over-year, driven by an increase in launch missions and higher average selling prices from HASTE missions [7][8]. - The Space Systems Unit is expected to report revenues of $95.4 million, reflecting a 24.1% growth from the prior year, supported by strong performance in spacecraft and satellite manufacturing [9]. Earnings Expectations - The bottom line is anticipated to show improvement, with a projected loss of seven cents per share, compared to a loss of eight cents in the previous year [1][6]. - Rocket Lab has an Earnings ESP of +18.18% and a Zacks Rank of 3, indicating a favorable outlook for earnings performance [4]. Cost Considerations - Increased operating costs, particularly from the Neutron program, a growing workforce, and rising R&D expenses, may negatively impact operating margins despite strong revenue growth [11][16]. Stock Performance - Rocket Lab's shares have increased by 844.6% over the past year, significantly outperforming the Zacks aerospace-defense equipment industry's growth of 55.3% and the broader Zacks Aerospace sector's return of 27.2% [12]. - The company's forward 12-month price-to-sales ratio is 24.03X, which is higher than the industry average of 9.61X, indicating a premium valuation [13]. Industry Outlook - The space economy is projected to reach $1.8 trillion by 2035, driven by the growing adoption of satellite and rocket technologies, enhancing long-term growth prospects for space stocks like Rocket Lab [15]. - Rocket Lab's Electron launch vehicle is noted as the second most frequently launched orbital rocket by U.S. companies, highlighting its competitive position in the market [15].