1 Wall Street Analyst Thinks Rocket Lab Stock Is Going to $15. Is It a Buy?

When an analyst hikes his or her price target on a stock by more than 50%, that's a notable move worthy of investigation. This happened late last week when a pundit tracking spacecraft maker Rocket Lab USA (RKLB 1.27%) cranked his a very meaty 67% higher. Let's take a look at the reasoning behind this bold move and, more importantly, gauge whether the stock is really such a compelling buy.

Readying for launch

The analyst behind that powerful, rocket-like boost was Stifel's Erik Rasmussen. His new Rocket Lab price target is $15 per share, quite the adjustment from his preceding $9. Rasmussen maintained his buy recommendation.

According to reports, the prognosticator's change followed a meeting with the company's CFO, Adam Spice, during Stifel's Midwest One-on-One Conference, a business event held for the financial services provider's clients. In their talk, Rasmussen came away confident that Rocket Lab will successfully deliver the upcoming Neutron rocket to the market.

Neutron is critical to Rocket Lab's future, as it will have significantly more carrying capacity than its current Electron. Getting Neutron onstream will allow the company to transport far heavier payloads into space, at a stroke vaulting it into the market for clients needing to get a lot of gear into space at once.

Coming in 2025?

In August, Rocket Lab reported a successful hot firing of the Archimedes engine that will catapult Neutron out of our world. This portends well for the overall Neutron project, which is slated to have its inaugural launch in mid-2025. So, to borrow a phrase from the space industry, it seems all systems are go for Neutron.

Of course, Stifel hiking its price target from $9 to $15 isn't as impressive when you consider that the stock was going for nearly $14 per share at the time. Still, I think any bullishness about Rocket Lab is entirely justified. The impression is that this is a company that knows what it's doing and is well positioned to expand its already strong position in this highly specialized (and high-potential) business.