Investors didn't quite know what to make of Rocket Lab USA's (RKLB 13.13%) earnings report last week. On the one hand, the U.S.-New Zealand space stock beat on sales, reporting $51.8 million for its fiscal fourth quarter 2022 -- more than the $49.2 million that Wall Street had predicted. On the other hand, Rocket Lab missed on earnings, reporting a loss of $0.08 per share -- worse than Wall Street's expected $0.07.  

Investors responded to the news first by selling off Rocket Lab stock by 6% over the two days after earnings. But then, on Friday, they bid Rocket Lab stock right back up -- up 8% in fact, erasing all the stock's losses, and pushing its share price back above where it traded prior to earnings.  

So who's right? The investors who sold Rocket Lab after earnings, or those who bought it?

Rocket Lab by the numbers

That really depends on how you look at the numbers. For example, Rocket Lab's sales growth was simply tremendous in Q4, up 88% year over year, and its growth for 2022 as a whole was even better -- more than twice the sales recorded in fiscal 2021.  

Rocket Lab set a new record for most launches in a year: nine successful orbital launches, or 50% more than it achieved in 2021. The company also advanced its reusable rocketry program, recovering an Electron rocket after splashdown in the ocean, and made progress with development of its newest rocket, the Neutron, which will have 35 times the payload of Electron. It completed construction of a Neutron production complex on Wallops Island in Virginia, and -- just after close of the quarter -- launched its first Electron rocket from the Wallops Flight Facility.  

On the other hand, Rocket Lab did lose $0.08 per share in the quarter -- 60% greater losses than a year ago, despite growing its share count by 5%. (For the full year, Rocket Lab lost $0.29 per share.)

Also over the course of the year, Rocket Lab burned $149 million in cash -- a burn rate 53% faster than it experienced in 2021.

From bad to worse

So not all of Rocket Lab's numbers were great. And in fact, some of them are likely to get worse before they get better.

Of particular note was Rocket Lab's guidance for Q1 2023 revenue. Looking out through the end of the quarter already underway, Rocket Lab warned that revenue is likely to range from $51 million to $54 million, which implies a pretty sizable miss given Wall Street is looking for $66 million.  

And granted, one way of looking at that projection is to say that Wall Street was very wrong in what it expected out of Rocket Lab in Q1. But another way to look at it is that Rocket Lab is not growing nearly as fast as investors had hoped it would. Indeed, if Rocket Lab ends up landing within its projected revenue range, it will show almost zero sequential growth between Q4 and Q1 (although year-over-year growth would be 29%).

Earnings, too, could be disappointing in Q1. Although Rocket Lab didn't do all the math needed to generate guidance for earnings as calculated according to generally accepted accounting principles (GAAP), it did provide estimates for gross margin, interest payments, operating costs, and share count -- all of which add up to about a $0.10 per share projected loss.  

And considering that Wall Street is forecasting a loss of only $0.08 per share in Q1, that appears to imply that Rocket Lab is going to miss earnings again three months from now.  

What it means for investors

Long story short, it's starting to look likely that Rocket Lab is going to give us back-to-back earnings misses -- and misses in four of its last five earnings reports, to boot, which is hardly the kind of performance most investors look for in a growth stock.

Worse, it could be another couple of years before things start looking up for Rocket Lab. First flight for Neutron (which will give a big boost to the company's ability to launch larger, more profitable, and simply more satellites) isn't expected until 2024 -- and it could always be delayed. And even if Neutron does arrive on time, it probably won't be until 2025 that Rocket Lab delivers its first profit, according to data from S&P Global Market Intelligence.

That may feel like a long time to wait to see Rocket Lab start earning money -- and the more earnings misses Rocket Lab delivers along the way, the longer that wait will feel.