Can Rocket Lab Stock Double From Here?

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Rocket Lab (RKLB) stock can double from its $54.73 close only if its satellite business, which builds for customers such as the Space Force, keeps growing through the delay to its new rocket. The shares have traded far higher, closing at $150.23 on May 27, 2026, 174.5% above that price. In four of the last five calendar years, the stock also rose 100% or more from one close to a later close within the same year. You probably know Rocket Lab for its Electron launches, but launches are now only part of the business. Yet the stock fell 22.3% from October 1 to October 30, the first flight of its larger Neutron rocket has been pushed to 2027, and the company still loses money. So how big has Rocket Lab’s satellite business become?

Most Of Rocket Lab’s Sales Now Come From Satellites

Rocket Lab’s satellite business, which builds satellites and their parts, brought in $189.5 million of the company’s $234 million in revenue in fiscal Q2 2026. That is about 81% of sales in one quarter. Satellite revenue rose 38.6% from the quarter before, mainly from the satellite manufacturing business, along with the first sales from Mynaric, which Rocket Lab bought during the quarter. Management said launch revenue fell 30% over the same months on a shift in how its launch work is booked.

The satellite business is growing so far, and so are its orders. Rocket Lab ended the quarter with a $2.36 billion backlog of work signed but still to be billed, and satellite work made up 60% of it. News reports said that backlog was up 137% from a year earlier. One of the new orders is a $397 million contract to build and launch multiple Flatellite spacecraft for the Space Force. Satellites, rather than rockets, now make up most of what Rocket Lab sells and most of what it has been hired to deliver.

Is Rocket Lab Losing Less While Neutron Is Late?

On operating income, yes. Rocket Lab’s operating loss was 24.6% of sales in fiscal Q2 2026, against 41.3% in fiscal Q2 2025, and it narrowed in each quarter in between while sales grew. Cash is another matter. Free cash flow was a use of $110 million in fiscal Q2 2026, about double the $55.3 million a year earlier. Management said cash use will stay high because of Neutron development and production.

That is where the worry sits. News reports said the shares fell about 6% in extended trading when Rocket Lab announced the Neutron delay on October 14. On the other side, Rocket Lab held $2,302 million in cash and short-term investments at June 30, 2026, against $134 million in debt. Much of that total came from $1.08 billion of new shares sold in fiscal Q2 2026, money management said is meant for acquisitions such as Iridium and general spending. The company announced in that quarter that it plans to buy Iridium, a deal it expects to complete in mid-2027.

What Could Go Wrong For Rocket Lab’s Satellite Business?

The size of the satellite business does not show how much profit each new order brings. Management expects GAAP gross margin of 29% to 31% for fiscal Q3 2026, against a GAAP 36.1% in fiscal Q2 2026, because of a shift in mix within the satellite business. On the August 10 call, management said the largest pieces of the backlog, the SDA Tranche 2 and Tranche 3 programs, have margins in the mid-30s. Management also expects the mix to help margins again after the third quarter.

At 44.8 times its last twelve months of sales, against 3.2 for the S&P 500 on the same basis, the price appears to assume the satellite growth keeps going. So far, the satellite business is growing and winning orders, and Rocket Lab’s operating loss is shrinking, but the cash it spends is higher than a year ago while Neutron is late. Rocket Lab’s free cash flow is the number to watch when it reports fiscal Q3 2026, expected in November 2026.

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