Rocket Lab Strengthens Ties With Japan: Should You Buy The Stock?

Core Insights - Rocket Lab USA, Inc. has expanded its presence in Japan through contracts with JAXA for two dedicated Electron missions and new multi-launch agreements with iQPS and Synspective [1][2][10] - The company has a total of seven upcoming launches with iQPS and 21 scheduled launches with Synspective, indicating strong customer retention and partnership growth in Japan [2][10] - Rocket Lab's stock has surged 558.1% over the past year, significantly outperforming the Zacks Aerospace-Defense-Equipment industry and the broader aerospace sector [4][10] Company Performance - Rocket Lab's shares have outperformed the S&P 500, which returned 16.5% in the same timeframe [4] - The company has successfully launched its 70th Electron mission, reinforcing its position as a leading launch service provider [7] - The official opening of Launch Complex 3 at Virginia Spaceport Authority's Mid-Atlantic Regional Spaceport is expected to enhance Rocket Lab's capabilities [8][11] Growth Drivers - The partnerships with JAXA, iQPS, and Synspective are expected to drive growth momentum, alongside successful missions and new product development [6][20] - The upcoming launch of the Neutron rocket in the second half of 2025 is anticipated to significantly expand Rocket Lab's launch capacity [11][20] Financial Estimates - The Zacks Consensus Estimate for Rocket Lab's 2025 and 2026 sales suggests year-over-year improvements of 35% and 43.7%, respectively [12] - Earnings estimates for 2025 and 2026 also indicate similar year-over-year growth [12][14] Valuation Metrics - Rocket Lab's forward price-to-sales (P/S) ratio is 40.00X, significantly higher than the peer group's average of 4.57X, indicating a premium valuation [16][18] - Other space stocks like LUNR and BA are trading at lower forward P/S ratios of 6.23X and 1.74X, respectively [18] Market Outlook - The company's expanding launch pipeline and solid growth outlook suggest long-term opportunities in the global space market [20] - Despite high operating costs and continued losses, the strong execution and growing demand for Rocket Lab's services present a compelling case for potential investors [21]