Although it's now been more than two months since its ballyhooed initial public offering, all eyes are still on Space Exploration Technologies (SPCX +0.45%) -- also known as SpaceX -- arguably at the expense of other space stocks. But that may be a mistake. At least one of the other names in the orbital launch business is quietly making inroads against the industry's biggest player.
That other company is Rocket Lab (RKLB -4.65%), which just signed a launch contract for a rocket that has yet to make its first flight.
Bigger and better
Rocket Lab helps companies design and deploy satellites and other space-based technology. Although it's technically not its biggest business, the company's highest-profile profit center at this time is its reusable Electron rocket capable of lifting up to 660 pounds into low earth orbit, or LEO.
Image source: Getty Images.
That's not the end of Rocket Lab's launch-capabilities ambitions, though. It's developing a much bigger reusable rocket called Neutron that will lift in excess of 28,000 pounds' worth of payload into LEO. Canada's space-based telecom outfit Kepler Communications even recently commissioned a dedicated launch of Rocket Lab's Neutron to deploy a handful of its satellites.
The curious part of the agreement? Neutron's never actually been flight-tested.
Unproven, yet still trusted
It's not from lack of trying. By early 2025, it looked like the rocket in question would finally be ready for initial flights by the end of that year. Then that milestone was pushed back to early 2026. Then it was pushed back again to late 2026, or even early 2027, as the company continues to address performance and safety issues. And that assumes no new concerns materialize in the meantime. They could.
NASDAQ: RKLB
Key Data Points
Kepler clearly isn't deterred, though. Even with other options -- including SpaceX -- for putting its satellites into low Earth orbit, it chose Rocket Lab's Neutron knowing it wouldn't be handling this contracted work until 2028, at the earliest. What gives?
Take the hint at face value
It's not always exactly clear why an organization chooses one company's service over another's. This instance is no exception. It would be short-sighted, however, to ignore the depth and breadth of the service that Rocket Lab brings to the table.
It's not just launch. Satellite components, engineering services, software, and propulsion are all in its wheelhouse, and more, particularly after its recent acquisitions of Iridium Communications and Optical Support. This company is a complete, vertically integrated solutions provider, whereas SpaceX isn't. Although this menu of capabilities may or may not matter to all satellite communications companies in search of launch services, clearly for some of them, the customized assurance that Rocket Lab brings to the table is making a marketable difference.
It's just something to consider if you're mulling stepping into a position in RKLB on this dip, which, by the way, may largely be fueled by the feverish but somewhat reckless bullish interest in SPCX at the expense of other worthy stocks in the industry. That dynamic won't last forever.
