Rocket Lab USA (RKLB +2.25%) has been on an incredible run, with its stock skyrocketing some 400% in the past year. The rocket company recently celebrated a record year for launches, solidifying its position as the second-most-utilized launch service in the U.S., right behind the industry giant SpaceX.
The company plans to debut a larger rocket this year, which has the potential to enhance its profit margins and boost earnings significantly. However, there's been a slight delay in the launch timeline, leading to a dip in the stock price in recent weeks. Currently, shares are 39% off their peak.
With the stock down in recent weeks, now may be an opportune moment for investors to jump in and grab some shares. Here's what investors need to know and what to expect next from Rocket Lab USA.
NASDAQ: RKLB
Key Data Points
A rapidly growing player in the space economy
Rocket Lab USA has become a go-to partner for companies launching small satellites into orbit. With its Electron rocket, the company conducts cost-effective missions for clients with smaller payloads.
On March 18, Rocket Lab deployed five satellites into low-Earth orbit for Kinéis, a French Internet of Things (IoT) operator. It was the fifth of a five-launch deal with the company. Since its inception in 2017, Rocket Lab has completed 61 missions, including a record 16 last year and four so far in 2025.
Rocket Lab also provides spacecraft engineering and design services, components, manufacturing, and on-orbit mission operations. This space systems business complements its launch services nicely and has been an excellent source of growth for the space company.
Last year was solid for Rocket Lab, which posted a record revenue of $436 million and a gross profit of $116 million. Its space systems business made up $81.6 million of this total gross profit, with launch services making up the remainder.
RKLB Revenue (TTM) data by YCharts
Expanding its presence in the space value chain
Rocket Lab recently announced it would acquire Mynaric AG, a provider of laser optical communications terminals for air, space, and mobile applications.
The acquisition allows Rocket Lab to scale the production of optical communication terminals, which are crucial for satellite-to-satellite connectivity. It aims to make these more affordable and available in larger volumes, strengthening Rocket Lab's ability to serve large satellite constellations and enhancing its manufacturing efficiency.
Mynaric is already a subcontractor to Rocket Lab for high-value contracts like the $515 million prime contract with the Space Development Agency. The acquisition gives Rocket Lab more control over the supply chain, improves production efficiency, and should help it provide more timely deliveries. Rocket Lab founder and CEO Sir Peter Beck said:
We have been very clear about this strategic direction for several years now -- Rocket Lab is pursuing every part of the space value chain. We launch our own rockets, we build satellites in constellation volumes, and now we're closing in on the final step and most valuable part of the space economy -- operating our own constellations to provide data and services from space using our newly announced Flatellite spacecraft.
The space systems business is growing nicely and has been an important part of Rocket Lab's overall business.
Its Neutron rocket launch has been slightly delayed
Another key component of its future growth will be its Neutron rocket. This is Rocket Lab's upcoming reusable medium-lift launch vehicle designed for a variety of missions, including deploying satellite constellations, cargo resupply, and interplanetary exploration. The rocket is expected to carry payloads of up to 13,000 kilograms to low-Earth orbit and is powered by Rocket Lab's Archimedes engines.
Image source: Rocket Lab USA.
The Neutron rocket gives Rocket Lab a larger launch vehicle that could help it earn more lucrative civil and defense contracts and better compete with SpaceX's Falcon 9 launch vehicle. The company estimates that Neutron could unlock revenue and profit that is six times greater than Electron, paving the way for significant growth and expanding margins.
There have been some questions about the readiness of its Neutron rocket, which it had planned to launch in mid-2025. The company is now targeting the launch of this rocket in the second half of 2025. It is a modest pushback, but there may be concerns that it could get pushed back further, which is one reason the stock has taken a hit over the past few months.
Is Rocket Lab USA a buy today?
Rocket Lab is carving out a spot in the space economy, which, according to estimates from McKinsey and Company, could grow to $1.8 trillion by 2035. The company boasts a backlog of $1.067 billion, showing robust demand for its launch services and space systems business.
The recent pushback of its Neutron rocket launch has weighed on the stock price recently and illustrates its vulnerability to volatility. The company has yet to generate a profit, and analysts project it may not be profitable until 2027. Given its lack of current earnings, further delays in its Neutron rocket launch could weigh on the share price, so the stock isn't ideal for conservative investors or those with a shorter time horizon.
That said, Rocket Lab is building on its position in the space economy. The eventual launch of its larger rocket will help improve margins, and its space components business has been growing steadily. I like its long-term growth prospects and think the recent dip could be a good opportunity for aggressive investors to scoop up shares in the budding space company.
