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Why Rocket Lab First Popped, Then Dropped On Monday
Rocket Lab (NASDAQ: RKLB) stock started Monday strong as its shares gained nearly 6% on news of a successful end-of-year rocket launch, putting another Synspective synthetic aperture radar (SAR) satellite in Low Earth Orbit. The space stock retraced quickly and, as of 11 a.m. ET, all the gains had been erased, with the stock up only 0.1%.
Still, the stock has more than quadrupled this year. Investors may believe Rocket Lab's run is done for now.
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Rocket Lab's 60% improvement
On Saturday, the company announced its 16th successful rocket launch of the year, a 60% improvement over 2023's tally of 10 rockets launched. The rocket launched from the company's primary launch site in New Zealand, carrying the sixth of 16 Synspective satellites, which the customer has reserved for launch, into orbit.
Rocket Lab noted that it remains the sole launch provider for Synspective, so the rest of those 10 launches can reliably be depended upon to keep adding to Rocket Lab's revenue, which currently totals more than $360 million per year.
Looking ahead to 2025
There were 10 launches in 2023 and 16 launches in 2024. Now, as the calendar turns to 2025, Rocket Lab CEO Sir Peter Beck says his company will "increase our launch cadence in the new year."
He didn't say by how much, though, so investors don't know how many total launches Rocket Lab is anticipating this coming year. Beck did note, however, than one of the launches will be a test launch of the company's long-awaited Neutron medium-launch vehicle, which, with a payload of 15 metric tons (in expendable configuration), will be about 50 times more capable than the company's current Electron rocket. However, it's priced (at $55 million) less than 7x of Electron's cost.
Wall Street analysts don't expect Neutron to turn Rocket Lab profitable immediately, although they do think profits might arrive in 2026. In the meantime, investors in Rocket Lab can look forward to, perhaps, 37% revenue growth in 2025 ($595 million in sales) and continued reduction in losses ($0.28 per share).
2024 was a good year for Rocket Lab, but 2025 should be even better.
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Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.
