Rocket Lab Stock To $27?

Rocket Lab (RKLB) stock has fallen 9.5% during the past day, and is currently trading at $39.48. Our multi-factor assessment suggests that it may be time to reduce exposure to RKLB stock. We are primarily concerned current valuation and a price of $27 may not be out of reach. We believe there are only a couple of things to fear in RKLB stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $20 Bil in market cap, Rocket Lab provides launch services and space systems solutions, designing and manufacturing small orbital launch vehicles and satellite platforms for commercial, aerospace, and government customers.

[1] Valuation Looks Very High

This table highlights how RKLB is valued vs broader market. For more details see: RKLB Valuation Ratios

[2] Growth Is Very Strong

• Rocket Lab has seen its top line grow at an average rate of 58.4% over the last 3 years
• Its revenues have grown 54% from $327 Mil to $504 Mil in the last 12 months
• Also, its quarterly revenues grew 36.0% to $144 Mil in the most recent quarter from $106 Mil a year ago.

This table highlights how RKLB is growing vs broader market. For more details see: RKLB Revenue Comparison

[3] Profitability Appears Very Weak

• RKLB last 12 month operating income was $-222 Mil representing operating margin of -44.1%
• With cash flow margin of -22.0%, it generated nearly $-111 Mil in operating cash flow over this period
• For the same period, RKLB generated nearly $-231 Mil in net income, suggesting net margin of about -45.9%

This table highlights how RKLB profitability vs broader market. For more details see: RKLB Operating Income Comparison

[4] Financial Stability Looks Very Strong

• RKLB Debt was $498 Mil at the end of the most recent quarter, while its current Market Cap is $20 Bil. This implies Debt-to-Equity Ratio of 2.5%
• RKLB Cash (including cash equivalents) makes up $688 Mil of $1.6 Bil in total Assets. This yields a Cash-to-Assets Ratio of 44.3%

[5] Downturn Resilience Is Moderate

RKLB saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• RKLB stock fell 82.8% from a high of $20.72 on 9 September 2021 to $3.56 on 27 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 21 November 2024
• Since then, the stock increased to a high of $69.27 on 15 October 2025 , and currently trades at $39.48

 
2020 Covid Pandemic

• RKLB stock fell 3.2% from a high of $10.44 on 16 December 2020 to $10.11 on 31 December 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 13 January 2021

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read RKLB Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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