Rocket Lab Gains 6.3% in the Past Month: How to Play the Stock?

Core Insights - Rocket Lab USA, Inc. (RKLB) shares have increased by 6.3% over the past month, outperforming the Zacks Aerospace-Defense Equipment industry, which declined by 2.5% [1] - The company's recent performance is attributed to notable acquisitions, successful launches, and advancements in new programs [4][11] Performance Comparison - Other defense equipment stocks, such as Heico Corporation (HEI) and Astronics (ATRO), have also shown positive performance, with HEI gaining 0.1% and ATRO gaining 33.8% in the same period [2] - Rocket Lab's stock performance is significantly better than the Zacks Aerospace sector's decline of 0.2% and the S&P 500's rise of 2.2% [1] Growth Drivers - The opening of Launch Complex 3 for the Neutron rocket is a critical development, enhancing Rocket Lab's position in the medium-lift launch market [4][12] - The completion of the 70th Electron launch reinforces its status as the most frequently launched small orbital rocket, indicating strong demand from commercial and government sectors [5][11] - Investments in semiconductor and sensor capabilities, supported by $23.9 million in federal funding, aim to enhance supply-chain security for national security space missions [6] Strategic Acquisitions - Rocket Lab's acquisition of Geost for $275 million will strengthen its role as a prime contractor for next-generation defense initiatives and expand its portfolio in mission-ready spacecraft solutions [7] Future Outlook - The Neutron program is expected to be a major growth driver, with its first flight anticipated in the second half of 2025 [12] - The company aims for over 20 Electron launches this year, positioning it for steady revenue growth [11] Financial Estimates - The Zacks Consensus Estimate for RKLB's 2025 revenues indicates a 34.7% improvement year-over-year, with earnings expected to grow by 34.2% [14] - For 2026, revenue estimates suggest a 46.7% increase, while earnings are projected to grow by 77.3% [14] Valuation Metrics - RKLB shares are trading at a premium, with a forward 12-month Price/Sales (P/S F12M) ratio of 28.44X, compared to the industry's average of 9.55X [18] - Other defense companies like HEI and ATRO are trading at lower P/S ratios of 9.34X and 1.72X, respectively [20] Conclusion - Rocket Lab's achievements in launches, facility openings, and strategic acquisitions highlight its strong execution and growing demand in both commercial and defense markets [21]