Rocket Lab (RKLB +9.46%) stock isn't for the faint of heart. Its share price has fallen 57% from its all-time high of $151 back in June. Still, analysts' average price target for the stock is $111.31 -- a 49% increase as of this writing.
So, are the analysts right about Rocket Lab, or are investors seeing things clearly? I think analysts might be on to something. Here's why.
Image source: The Motley Fool.
Rocket Lab has significant momentum
Rocket Lab is one of the largest rocket launch companies, providing launch services to both private companies and the U.S. government. And business is booming. The company had a record 31 launch contracts in Q1 2026, selling more in the quarter than it did in all of last year. Rocket Lab sales accelerated as well, rising 64% to $200 million.
Analysts' bullish take on Rocket Lab is due in part to its growing revenue and its impressive backlog of launch contracts worth $2.2 billion -- up 108% from the year-ago quarter. And Rocket Lab's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss was $11.8 million, far better than analysts' consensus estimate of a loss of $26 million.
At least seven analysts raised their price targets following the first-quarter results. And more good news came when Rocket Lab announced a $397 million contract with the U.S. Space Force to develop, launch, and operate multiple advanced flat satellites. Rocket Lab will use its upcoming Neutron rocket for the launches.
That news came on the heels of an additional $266 million U.S. Space Force contract with Rocket Lab, in which the company will conduct 12 suborbital launches and up to six additional launches, with the first being conducted before the end of this year.
NASDAQ: RKLB
Key Data Points
Rocket Lab isn't without its risks
Even with all that's going right for Rocket Lab right now, there are some significant risks. For one, the company isn't profitable -- it had a net loss of $45 million in the first quarter.
Rocket Lab stock is also trading at a premium, with a price-to-sales ratio of 53, which is far more expensive than the tech sector P/S ratio average of about 7. It's also worth noting that share price swings in other space stocks, especially Space Exploration Technologies, or SpaceX, can affect Rocket Lab's stock because the industry is so niche.
Still, for investors seeking a fast-growing space stock with significant upside from its current price, Rocket Lab could be a good bet. But its stock price is likely to be volatile for a while, so a smaller position is probably better than going all-in on Rocket Lab right now.
