Please ensure Javascript is enabled for purposes of website accessibility

Why Rocket Lab Stock Roared Higher Today

By Rich Smith – Sep 7, 2021 at 10:37AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earnings are coming. Here's what to look for.

What happened

For the third trading day in a row, Rocket Lab USA (RKLB -2.51%) stock roared higher Tuesday.

After erupting nearly 15% in response to news of a big expansion in production of reaction wheels Thursday, then proceeding to gain more than 16% Friday, on Tuesday, new space stock and occasional defense contractor Rocket Lab is up another 13.4% as of 10:15 a.m. EDT.

Horizontal Electron rocket.

Image source: Rocket Lab.

So what

Why is that?  

On Friday evening, Rocket Lab announced that for its first time as a public company, it will report earnings on Wednesday, Sept. 8. Tomorrow evening, we'll hear directly from Rocket Lab on how fast its revenue has grown since the end of June, and how close the company might be getting toward profitability.

At last report, Rocket Lab was generating revenue at the rate of about $59 million a year through the end of June, but losing money on its launches. Its run rate for profit was about $65 million per year, and free cash flow was closer to negative $82.6 million per year.

Now what

Now, Rocket Lab will have a chance to change that story -- or at the very least, explain why it's losing so much money and when it expects to break even and start earning money instead.

Management will also get a chance to speak directly to investors and describe its plans for the future -- whether it really intends to spend a spaceship to Venus on its own dime, for example, and how far along it has progressed on building a new Neutron rocket with 27 times the payload capacity of its workhorse Electron rocket.

Whether Rocket Lab stock can maintain and extend its growth trajectory over the coming quarter will depend largely on what Rocket Lab management tells us tomorrow.

Rich Smith owns shares of Rocket Lab USA, Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Rocket Lab USA, Inc. Stock Quote
Rocket Lab USA, Inc.
RKLB
$4.08 (-2.51%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
356%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.