RKLB Stock: What’s Behind The 39% Drop?

Rocket Lab (RKLB) stock fell 39% between mid-June and September 10, while the S&P 500 gained 2.4%. The stock fell 39%—about twice as far as L3Harris Technologies, down 18.9%, and far more than Lockheed Martin, down 1.3%, and Northrop Grumman, down 5.3%—suggesting company-specific headwinds compounded broader sector softness. Yet the company just posted record revenue, and the CEO counts more than $1 billion of new contracts since Q2 2026 began. None of that changed the Neutron rocket’s calendar.

Rocket Lab Is Growing Fast, But Profitability Remains Out Of Reach

Revenue reached a record $234 million in Q2 2026, up 62% from a year earlier, with $189.5 million from Space Systems, which builds satellites. A $397 million Space Force contract covers Flatellite spacecraft launching on Neutron.

That growth has yet to generate net profit, though operating margins improved to -29.1% and net margins to -21.5%—both three-year highs compared to historical averages near -48%. For Q3 2026, management guides an adjusted EBITDA loss of $17 million to $23 million, wider than the $8.8 million loss in Q2 2026. The Q2 2026 loss was well below management’s $20 million to $26 million guide. Higher operating costs go mainly to Neutron development and its first flight.

Because Its Stand-Alone Cash-Flow Plan Runs Through A Rocket That Has Not Flown

Even after the fall, Rocket Lab is worth about $39 billion, roughly 50 times its $0.77 billion of trailing revenue. That multiple is a bet on when the losses end.

On a stand-alone basis, the CFO expects adjusted EBITDA to turn positive the quarter after Neutron’s first successful test launch, and positive cash flow probably 18 to 24 months later, as the company keeps building a fleet of Neutron rockets. Any delay to that launch pushes both back. The CEO says the end-2026 launch window is narrowing, calling it a deliberate trade-off to ensure faster scaling by flight ten.

Waiting also burns cash. Non-GAAP free cash flow was a use of $110.1 million in Q2 2026, against $77.4 million in Q1 2026, driven by building later Neutron rockets early and restocking the supply chain of Mynaric, acquired in Q2 2026. The Mynaric part is well in hand, the CFO says, but management guides Q3 2026 free cash flow to stay negative at elevated levels. The CFO’s caveat is Rocket Lab’s pending Iridium acquisition, which would reset that picture on closing.

And The Iridium Deal Is Not Expected To Close Until Mid-2027

Iridium runs a constellation of 66 satellites and brought in more than $870 million of revenue over the past year, more than Rocket Lab’s twelve-month total. The CFO says it generates substantial free cash flow, though the CEO concedes it grows relatively slowly.

Part of the bill lands on shareholders. In mid-August, Rocket Lab replaced its stock-sale agreement with one for the unsold remainder, up to about $1.9 billion, to fund part of Iridium’s cash payments and reduce debt commitments. That ceiling is about 5% of its market value. The bigger cost is time, with closing expected in mid-2027.

So record revenue, new contracts, and a falling stock do not contradict each other. At about 50 times revenue, the price depends on the losses ending, and both routes there, a first Neutron flight and a closed Iridium deal, are still ahead. Neutron’s launch window, the nearer one, is narrowing.

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