Space company and former space special purpose acquisition company (SPAC) Rocket Lab USA (RKLB -2.58%) blasted higher last week after reporting third-quarter earnings, ending the week up nearly 9% (and up nearly 19% since the day before earnings).

Earnings alone weren't the only factor fueling Rocket Lab's rise, however. Famed growth investor Cathie Wood also lent a hand, as her various Ark Investment funds poured money into the stock both before and after the earnings results were released. Over the month preceding the release, Wood's funds steadily added 729,000 Rocket Lab shares to their portfolios. And on earnings day itself -- Nov. 9 -- Ark added another 329,507 shares, its biggest one-day buy since last September.  

So what might Wood find attractive in Rocket Lab stock?

Rocket Lab reports

Let's start with 10 times earnings growth, because that's what Rocket Lab delivered last week -- Q3 revenue of $63.1 million, up 1,093% year over year.

Rocket Lab launched three missions in Q3. Add four more launches in the first half of the year, and two more since the end of Q3, and the company has now completed nine successful launches so far this year -- a record for Rocket Lab -- and has maintained a pace of launching once per month since April.    

On Monday, the company also confirmed that after five months of travel, its Capstone mission to place a satellite in lunar orbit has reached its destination and is presently conducting "clean-up maneuvers" to fine-tune this orbit.  

Wrapping up space launch news, Rocket Lab confirmed that it has accelerated development of its newest rocket, the Neutron reusable launch vehicle, securing permission to test its Archimedes engines at NASA's Stennis Space Center in Mississippi, and beginning construction of prototype parts for the rocket. (First launch is still expected to take place in 2024.)

What's next for Rocket Lab

That, as they say, is the good news. Now here's the bad:

Rocket Lab appears to still be a ways away from actually earning a profit from any of the above. Losses for the quarter totaled $0.07 per share -- in line with expectations, and an 82% reduction in losses versus one year ago. Still, Rocket Lab made no promise of turning profitable in the fourth quarter. To the contrary, while management says gross profit margin will be positive, operating expenses will eat up all that gross profit and more -- and analysts polled by S&P Global Market Intelligence don't see Rocket Lab turning profitable under generally accepted accounting principles (GAAP) before 2025, a year after Neutron starts flying.

Also disappointing: Rocket Lab's guidance shows Q4 revenue coming in at no more than $54 million, and perhaps as low as $51 million -- as much as a $12 million quarter-on-quarter decline, and well below the $58.5 million in revenue that Wall Street is expecting for the quarter. Wall Street is also expecting Rocket Lab to report a Q4 loss of only $0.08 per share -- and Rocket Lab may miss that estimate as well, if its revenue falls short of expectations.  

Should investors buy the stock?

So considering all the above, should you buy Rocket Lab stock? It depends.

Rocket Lab does appear to be on the right trajectory to reach profitability -- eventually. How quickly it gets there, meanwhile, will depend less on Rocket Lab's launch operations than on the company's faster-growing space systems (i.e., satellite parts) business.

In giving Q4 guidance, Rocket Lab noted that Space Systems is expected to produce between $34 million and $37 million in revenue next quarter -- at least twice the revenue the company gets from launch services, and potentially more than twice. And according to data from S&P Global, space systems is the Rocket Lab division responsible for generating all of the company's gross profits.

This isn't a new trend for Rocket Lab -- it actually became apparent back in the first quarter. But if you're an investor in Rocket Lab, it's clearly the trend you want to watch closest. If Rocket Lab does end up surviving the rocket industry shakeout currently underway, and reaches profitability as projected, it's going to be because of its space systems business -- not its rocket launches.