Shares of Rocket Lab (RKLB +0.42%) are down more than 13% so far this year. This is despite the excitement around space stocks, especially the initial public offering (IPO) of Space Exploration Technologies (SPCX -3.41%), commonly known as SpaceX, on June 12.
The reasons for Rocket Lab's slump vary. In the fourth quarter of 2025, the company reported improved revenue of $180 million, up 36% year over year, and a loss per share (EPS) of $0.10, even with the same period a year earlier. Yet the stock dropped after the earnings release because Rocket Lab announced that the launch of its medium-lift reusable rocket, Neutron, would be pushed back to later in 2026. In a test, the Neutron rocket suffered a tank failure in early January.
In the first quarter of 2026, the stock jumped 34% after the company's earnings report, with Rocket Lab reporting revenue of $200.3 million, up 63.5% year over year, and an EPS loss of $0.07, after an EPS loss of $0.12 in the first quarter of 2025.
Image source: Getty Images.
The reason for the stock's rise after the second quarter report is clear. Revenue growth is nice, but investors are looking for improved profitability. However, there is another number that would really make a difference when the company -- founded by New Zealand entrepreneur Peter Beck -- announces its second-quarter earnings on Aug. 10: a list of Neutron commercial launch contract bookings, or a specific timeline in Neutron's first hot-fire test.
NASDAQ: RKLB
Key Data Points
Why the Neutron launch matters so much
While the company's Electron launches have given it credibility, it is losing ground in the space race. The more it delays the launch of Neutron, the more competitors in the middle-lift category, such as SpaceX's Falcon 9 and Relativity Space's Terran R, gain ground. Neutron's first launch was initially expected around this time.
The Electron rocket has a significant share of the small-satellite launch market, but payloads are increasing, and Electron can carry only roughly 300 kilograms (kg). Each Electron launch brings in $7.5 million to $8.5 million, but a Neutron launch, with a payload of up to 13,000 kg, will fetch $50 million to $100 million per launch, competitive compared to SpaceX's Falcon 9. Like Electron, the Neutron rocket is reusable.
The company has other potential catalysts
On July 27, Rocket Lab announced it had secured its largest launch contract to date, a $266 million multi-launch deal with the U.S. Space Force. The company will have 12 suborbital launches, with as many as six additional launches for the Space Force, the first of which is expected no earlier than the end of this year.
This award leverages Rocket Lab's modified HASTE (Hypersonic Accelerator Suborbital Test Electron) vehicle. HASTE missions carry a significantly higher average selling price and stronger profit margins than its commercial Electron launches.
The company is also in the process of buying Iridium, which provides global voice, data, and positioning, navigation, and timing satellite services. That $8 billion deal with Iridium would help transform the company into a vertically integrated space operator. Instead of just building components or putting other companies' satellites into orbit, Rocket Lab will now own and operate one of the world's most established low-Earth-orbit satellite networks.
One note of caution
If the company can continue to improve revenue and profitability, and show it is on course to launch its Neutron rocket, its shares could certainly spike. It's important to realize, though, that the stock carries significant risk.
First, Rocket Lab isn't profitable, and even with its share price drop this year, it is trading at around 49 times trailing sales, a significantly high valuation. Just like one of its rockets, the price of its shares could also, with any bad news, return to Earth pretty quickly.
