The space economy is one of the hottest investment themes of 2026. Privately held SpaceX leads the way and is reportedly planning an IPO this year, with a valuation of $1 trillion or more expected at its public market debut.
But what if you want to buy a stake in the fast-growing space economy right now? The good news is that any investor can do this by buying Rocket Lab (RKLB 3.02%) stock, a hot competitor to SpaceX whose stock is up 594% over the last five years.
Let's take a look at Rocket Lab's business and see where the stock might be in one year.
Image source: Getty Images.
Next-generation rocket technology
Rocket Lab began as a project by New Zealander Peter Beck, evolving into one of the most ambitious space flight companies in the world. First, the business began launching its small Electron rocket, providing niche launches previously underserved for commercial customers. Then it began moving into building actual space systems for customers, including satellites and solar arrays.
Both product categories have driven impressive revenue growth and the company's backlog. Revenue was $554 million over the last 12 months and is up almost 1,000% over the last five years. Its rocket launch backlog keeps growing, up 56% year over year last quarter to over $500 million.
At the same time, Rocket Lab is burning a lot of cash, with a free cash burn of $232 million over the last 12 months. This is mainly attributed to its investments into a new, larger rocket called the Neutron. The Neutron will have a much larger payload capacity than the Electron and will directly compete with SpaceX, which can get over $50 million in revenue per rocket launch for its missions.
The Neutron can help Rocket Lab take the next step in growing its revenue. However, there have been some testing delays, pushing its first test flight to later in 2026 than originally hoped. More delays like this will keep Rocket Lab from earning commercial revenue from the Neutron in 2026. Without it, the company will likely not generate a profit.
NASDAQ: RKLB
Key Data Points
Where will Rocket Lab stock be in one year?
Rocket Lab has made significant progress in growing revenue and improving gross margins. A year from now, a bull for the stock may say that Rocket Lab will prove the Neutron can work while simultaneously growing its Electron and space systems business units. This will lead to huge growth in backlog and further momentum, allowing the company to push for growth and directly compete with SpaceX. The stock may be higher in this scenario.
A bear on the business may argue that the company has never proven anything with the Neutron rocket, providing massive uncertainty for a business that has never generated a profit.
Even if the bulls are right, Rocket Lab stock may be overvalued today. The stock trades at a market cap of $39 billion, giving it a price-to-sales ratio (P/S) of 67, which is high for a low-gross-margin operation.
Even though the business is growing quickly, this is a recipe for disappointing stock returns. Rocket Lab stock may or may not be higher in a year, but it is likely to disappoint investors over the next 10.
