Rocket Lab’s Ascent: A Year of Records and New Heights
For nearly a decade, the space industry has awaited a credible challenger to SpaceX’s dominance.
In 2024, Rocket Lab delivered, with its Electron rocket setting a new benchmark for small launch vehicles.
The Electron Rocket achieved a remarkable milestone, becoming the fastest commercial rocket to complete 50 flights, and closed the year with a company-record 15 launches—a testament to its reliability and growing market appeal.
While Rocket Lab celebrated Electron’s achievements, its highly anticipated Neutron launch vehicle faced delays.
Originally slated for a 2024 debut, Neutron’s maiden flight has slipped to 2025. While not the most protracted deferral in the annals of aerospace, it underscores the lingering industry-wide challenge of developing a viable competitor to SpaceX’s Falcon 9. Encouragingly, Neutron has already secured commercial commitments, signaling market confidence in its eventual success.
A Stratospheric Year for RKLB Stock
Rocket Lab’s success wasn’t confined to the launch pad.
For three years, we have highlighted RKLB as our second-highest recommendation after Palantir (PLTR), and 2024 rewarded that confidence richly. Shares of the company soared a staggering 360.6%, delivering jubilation to shareholders and establishing Rocket Lab as a standout performer in the aerospace sector.
Given its recent trajectory, we see further upside for Rocket Lab, elevating RKLB to our top recommendation for 2025. The company’s blend of operational excellence, burgeoning market demand, and a robust pipeline—including Neutron—positions it to capture even greater market share in the burgeoning commercial space sector.
This overview serves as a prelude to our deeper dive into what has fueled Rocket Lab’s meteoric rise, the strategic innovations propelling its success, and the opportunities that lie ahead in 2025 and beyond. For investors and industry watchers alike, Rocket Lab’s ascent is a story worth following.
Through much of 2024, Rocket Lab’s stock endured a frustrating inertia. By July, shares had slipped over 5% year-to-date, leaving investors questioning whether the small launch pioneer could reclaim momentum.
Then, in August, the trajectory shifted dramatically, the spark came on August 8, when Rocket Lab released its second-quarter 2024 financial results. The company reported a record-breaking $106 million in quarterly revenue, alongside a growing order backlog of $1.07 billion—a 5% increase from the previous quarter. These results marked a pivotal moment, signaling operational strength and burgeoning demand for the Electron launcher.
This optimism extended into the fall. Between September and October, Rocket Lab’s stock surged 71%. But it was in November that the ascent truly gained pace. On November 12, the company delivered its third-quarter financial report, revealing $104.8 million in revenue—surpassing analysts’ forecasts of $102.3 million—and narrowing its per-share loss to $0.10, compared to the expected $0.11 loss.
Perhaps more striking was management’s guidance for fourth-quarter revenue between $125 million and $135 million, a projection that, if realized, would represent a stunning 117% year-over-year growth.
Investor enthusiasm reached fever pitch, propelling the stock 155% higher in November alone and setting the stage for a December rally that left Rocket Lab with a year-end market capitalization of approximately $13.6 billion.
Rocket Lab’s financial health and growth trajectory shine all the brighter when contrasted with the struggles of its peers. Many competitors have faltered in recent years, battling solvency issues, while Rocket Lab has solidified its position as the clear runner-up to SpaceX in the commercial space race.
Despite this, the valuation disparity remains stark. Rocket Lab’s $13.6 billion market cap pales next to SpaceX’s reported $350 billion valuation. This gap underscores the potential for Rocket Lab to close the distance as it cements its place as the industry’s number-two launch provider.
In the near term, we maintain a sell target of $36 per share, equating to a market cap north of $20 billion. Longer-term, we estimate Rocket Lab could command a valuation representing 10% of SpaceX’s, translating to a share price in the range of $45 to $50.Key to this trajectory is the impending debut of the Neutron rocket, poised to expand Rocket Lab’s capabilities into medium-lift launches—a segment critical for sustained growth and market share capture. With this milestone on the horizon, Rocket Lab’s future seems as promising as its recent past has been extraordinary.
Investors may want to fasten their seatbelts. The journey is just beginning.
Despite securing its place as the third most-launched rocket in history, Rocket Lab’s Electron is not positioned to compete with SpaceX’s Falcon Heavy. Its payload capacity is far too modest to challenge such a behemoth. Enter the Neutron, Rocket Lab’s ambitious next act, designed to vie with SpaceX’s Falcon 9—a heavy-lift workhorse of the modern space era.
Neutron’s allure lies in its potential: the capacity to support interplanetary missions and crewed flights—capabilities that could elevate it from a mere competitor to a pivotal player. However, in sheer payload heft, Falcon 9 retains the edge, outperforming Neutron in low Earth orbit (LEO) and geostationary transfer orbit (GTO) capacity—a reality Rocket Lab itself tacitly acknowledges, offering no GTO specifications for Neutron at present.
In essence, Neutron aims to bridge a gap: carving a niche between the Falcon 9 and its more imposing sibling, Falcon Heavy. Yet, such ambition carries an asterisk. Neutron remains in development, its promises untested and its potential unproven.
If Rocket Lab can translate its bold blueprint into reality, Neutron could emerge as a compelling choice for NASA’s interplanetary ambitions and other flagship missions. But the journey from vision to validation is fraught with technical and operational challenges. For now, the aerospace world watches with cautious anticipation, awaiting what could become Rocket Lab’s defining moment—or its most sobering trial.
What sets Neutron apart is its ambition and innovation. It is poised to become the largest composite rocket ever constructed—a testament to Rocket Lab’s engineering ingenuity. Progress is evident; earlier this year, the company successfully test-fired its Archimedes engine, a key milestone that underscores its commitment to production and engine qualification.
Neutron’s competitive edge lies not only in its engineering but also in its economics. By design, the platform aims to rival SpaceX in cost efficiency, potentially disrupting the current industry dynamics. With its inaugural launch on track for mid-2025, Neutron could position Rocket Lab as a formidable contender in the medium-lift sector.
Financially, Rocket Lab appears well-prepared for the challenge. With a billion-dollar backlog from its Electron launches and a robust cash reserve, the company possesses the resources to realize its vision. The successful deployment of Neutron would mark a pivotal moment in the firm’s trajectory—and the broader space race.
For now, the countdown begins, and with each milestone, Rocket Lab inches closer to redefining its place among the stars.
When Rocket Lab first unveiled the Neutron, it bore a resemblance to a scaled-up Electron with Falcon 9-inspired landing legs adorning its base. The vision was clear: a reusable first stage and an upmass capability to low Earth orbit (LEO) of 8,000 kilograms.
But as with any ambitious endeavor, the design would evolve. Later that year, Beck enhanced the Neutron’s specifications, announcing a LEO capacity of 8,000 kilograms with the first stage returning—and a substantial 15,000 kilograms without recovery. Alongside these technical refinements came a visual transformation.
The rocket’s frame grew stouter, boasting a 7-meter diameter and an integrated fairing that opened like a crocodile’s maw, a novel feature tailored to simplify satellite deployment. The landing legs morphed into fixed fins, permanently affixed to the rocket’s base—a marriage of function and form.
A Look at Neutron’s Development:
Neutron stands poised to address the medium-lift launch demands of both government and commercial missions, carving a strategic niche in an increasingly competitive market. Its selection for NASA’s Venture-Class Acquisition of Dedicated and Rideshare (VADR) contract builds on earlier accolades, including its inclusion in the U.S. Space Force’s Orbital Services Program-4 (OSP-4) — a sweeping $986 million IDIQ (Indefinite Delivery/Indefinite Quantity) contract. Moreover, Neutron appears well-positioned to join the prestigious National Security Space Launch (NSSL) Lane 1 program, another lucrative IDIQ initiative valued at $5.6 billion over five years.
Progress on the rocket’s launch infrastructure is evident at Wallops Island, Virginia, where the dedicated site nears completion, with readiness expected in the coming months. Across Rocket Lab’s U.S.-based production and testing facilities, the pace remains unrelenting. The Archimedes engine, the beating heart of Neutron, is undergoing rigorous testing alongside full-scale component evaluations and infrastructure expansions.
Slated for its maiden voyage in mid-2025, Neutron will launch from Rocket Lab’s Complex 3 in Virginia. If its trajectory of development continues unimpeded, Neutron could solidify Rocket Lab’s position as a formidable player in medium-lift orbital delivery, meeting the ambitious demands of tomorrow’s spacefaring enterprises.
Rocket Lab’s Business Flywheel:
From Launch Provider to End-to-End Space Company
Rocket Lab is rapidly evolving into a fully integrated space company, with a business flywheel that begins with its core strength in small satellite launch services and expands across the entire space value chain.
The flywheel begins with the company’s reliable, cost-effective Electron rocket, which serves as the cornerstone of its launch services for a wide range of commercial and governmental customers. This launch capability not only drives immediate revenue but also establishes the company’s reputation as a key player in the global space sector.
The success of Electron fuels the development of the next-generation Neutron rocket, positioning Rocket Lab to handle a broader spectrum of missions — from medium-lift launches to interplanetary endeavors. As the company increases its launch cadence and expands its infrastructure, the flywheel accelerates, creating further opportunities for revenue generation, partnerships, and market expansion.
Beyond launch services, Rocket Lab is rapidly advancing its satellite systems and space technologies, including the development of its Photon satellite platform and space applications. This extension of capabilities allows Rocket Lab to offer end-to-end solutions — from satellite manufacturing to deployment and in-orbit services — making it an increasingly valuable partner for space-based businesses and governments.
As Rocket Lab continues to scale its operations and capabilities, the flywheel gains momentum, positioning the company to capitalize on the growing demand for space services, innovation, and infrastructure. From launches to satellite services and beyond, Rocket Lab is poised to become a central hub in the expanding space economy.
Rocket Lab’s revenue engine is largely fueled by its satellite manufacturing arm, Space Systems, which has quickly established itself as a significant player in the space industry. After years of intensive in-house research and development, complemented by strategic acquisitions, the company now offers a suite of four standardized spacecraft platforms. These are augmented by an array of satellite components, including separation systems, radios, solar arrays, and highly specialized, bespoke spacecraft built to meet the unique demands of its customers.
Currently, Rocket Lab boasts an impressive production backlog of over 40 satellites, with orders from high-profile clients such as NASA, the Space Development Agency (SDA), Varda, and Globalstar. The company’s growing portfolio includes satellites like First Light, Pathstone, CAPSTONE, and Winnebago-1, all of which are either operational or nearing deployment. Notably, the company is also preparing for the launch of two scientific spacecraft for NASA’s ESCAPADE mission to Mars.
As a vertically integrated satellite manufacturer, Rocket Lab is distinguished by its ability to build key spacecraft systems in-house. From navigation and avionics to power, communications, and propulsion, the company has full control over the critical components that power its satellites, providing it with a competitive edge in both efficiency and customization. This integration not only positions Rocket Lab as a leading force in satellite manufacturing but also ensures greater reliability and innovation across its growing space systems division.
Rocket Lab, traditionally recognized for its launch capabilities, has methodically transformed itself into a comprehensive space company through a strategic blend of organic growth and targeted acquisitions. This shift is underpinned by a sharp focus on building out its space systems division, with the goal of expanding beyond just launch services to encompass the entire space ecosystem—from satellite manufacturing to mission software development.
The company’s inorganic growth has been largely driven by acquisitions that target key pinch points in the value chain, identifying areas of constraint and subsequently either developing in-house solutions or purchasing established businesses to fill these gaps. This approach has enabled Rocket Lab to broaden its technological capabilities and integrate critical components for space missions.
Among the company’s most significant acquisitions are:
Sinclair Interplanetary (~$17M, April 2020): Specializing in satellite hardware, particularly star trackers and reaction wheels, this acquisition marked Rocket Lab’s entry into the precision satellite components market.
Advanced Solutions Inc. (ASI, $45.5M, October 2021): A leader in space software, ASI brought with it mission simulation systems and guidance, navigation, and control (GNC) technologies, enhancing Rocket Lab’s ability to offer end-to-end mission support.
Planetary Systems Corporation (PSC, ~$65-80M, November 2021): This acquisition focused on satellite hardware, including dispensers and separation systems, integral for deploying payloads into space efficiently.SolAero (January 2022, $80M): A key acquisition in the space solar power sector, SolAero provides Rocket Lab with cutting-edge solar technology for its spacecraft, a critical component for long-duration missions.
The company’s growing reputation is evidenced by its robust production backlog of over 40 satellites for esteemed clients like NASA, the Space Development Agency (SDA), Varda, and Globalstar. Among the rockets launched or operational are First Light, Pathstone, CAPSTONE, and Winnebago-1.
Furthermore, additional spacecraft, such as the two science-focused satellites for NASA’s ESCAPADE mission to Mars, are ready for launch.
Rocket Lab stands out as a vertically integrated manufacturer, designing and building key satellite components in-house—ranging from navigation systems to avionics, power and communication systems, as well as propulsion technologies. This approach affords the company greater control and flexibility in meeting the needs of its diverse client base.
Beyond satellite production, Rocket Lab has expanded its capabilities to mission operations, playing a pivotal role in several high-profile projects. For example, it supports the MethaneSat mission for the Environmental Defense Fund (EDF) and the Blackjack and Mandrake missions for DARPA. Additionally, its flight software and guidance, navigation, and control (GNC) technologies are featured in the Blue Ghost lunar lander, slated for a lunar mission with NASA in the coming days.
With over 1,700 satellites currently in orbit using Rocket Lab’s technology, the company’s footprint in space is undeniable. Furthermore, it is managing over $720 million in spacecraft programs, signaling its ambition and momentum as it continues to expand its reach in the space sector.
Rocket Lab has diversified its space operations beyond just launching rockets, providing a suite of spacecraft and satellite solutions. These include Photon, Pioneer, Lightning, and Explorer—each designed to serve specific needs in satellite development and space missions. Here’s a breakdown of each:
1. Photon
Photon is Rocket Lab’s flagship spacecraft platform and is designed for a wide variety of mission profiles, including Low Earth Orbit (LEO) and Geostationary Transfer Orbit (GTO) missions. It’s an end-to-end satellite solution that includes everything from propulsion to power management and communications. Photon comes in multiple configurations, from small payloads to more complex missions. The platform is renowned for its flexibility, offering both standard and bespoke designs tailored to specific customer needs. Photon’s versatility has made it a key player in Rocket Lab’s efforts to develop satellite constellations and other space operations.
2. Pioneer
Pioneer is a satellite platform focused on supporting interplanetary missions and large-scale satellite deployments. It is designed for higher-capacity payloads compared to Photon, and offers more robust capabilities, including extended propulsion options and enhanced power generation systems. Pioneer is geared toward customers with needs for more sophisticated space operations, such as Earth observation or deep space exploration. Its ability to host larger payloads and cater to complex mission requirements positions it as a more advanced and scalable option for space missions beyond LEO.
3. Lightning
Lightning is a compact, high-performance satellite platform developed for rapid, responsive deployments. It is optimized for small and medium-sized payloads, and is ideal for missions where speed, efficiency, and cost-effectiveness are key priorities. Lightning’s focus is on rapid iteration, allowing for quick launches and quick-turnaround projects. This platform supports a wide range of commercial, government, and scientific applications, especially those requiring agile, responsive satellite systems for near-real-time data collection, such as in telecommunications or Earth monitoring.
4. Explorer
Explorer is Rocket Lab’s specialized satellite platform designed to support cutting-edge scientific research, as well as more complex space missions that require unique payload capabilities. This platform is adaptable for a wide variety of missions, including space exploration, remote sensing, and scientific experimentation. Explorer offers higher payload capacity compared to Photon and Lightning, and is often used for missions that involve detailed scientific instruments or complex technology demonstrations. It’s a versatile platform tailored for customers who require a combination of research-oriented and operational capabilities, including government agencies, academic institutions, and commercial entities focusing on scientific discovery.
In summary, Rocket Lab’s four non-launch vehicles provide a comprehensive range of satellite and spacecraft solutions, addressing mission complexity, payload size, and customer-specific needs across various space applications—from small, rapid deployments to large-scale, interplanetary missions.
Rocket Lab reported a 55% increase in third-quarter revenue, rising to $104.8 million from $67.6 million a year earlier, surpassing Wall Street’s consensus estimate of $102 million. Despite the top-line growth, the company’s net loss widened, increasing to $51.9 million from $40.6 million. However, the loss per share of 10 cents came in slightly better than analysts’ forecast of an 11-cent loss.
Looking ahead, Rocket Lab has set forth its guidance for the fourth quarter of 2024. The company expects revenue to fall between $125 million and $135 million, with GAAP gross margins projected in the range of 26% to 28%. Non-GAAP gross margins are expected to be between 32% and 34%, reflecting the company’s ongoing efforts to scale operations. Operating expenses are forecast to fall between $84 million and $86 million on a GAAP basis, with non-GAAP operating expenses expected between $75 million and $77 million. Additionally, interest expense is estimated at $1.5 million, while adjusted EBITDA loss is expected to fall between $27 million and $29 million. The company anticipates having 501 million basic shares outstanding by the end of the quarter.
As of Q3 2024, Rocket Lab has achieved a YTD gross margin of 26.1% on a GAAP basis, or roughly 31% non-GAAP. For its Electron rocket, Rocket Lab is currently seeing non-GAAP gross margins in the low 30s and aims to push this figure above 40% as it increases its launch cadence to two per month. The Space Systems division, by comparison, is achieving GAAP gross margins between 25% and 35%, with merchant components delivering non-GAAP margins exceeding 40%.
Goldman Sachs Maintains Neutral on Rocket Lab USA, Raises Price Target to $13.5
Stifel Maintains Buy on Rocket Lab USA, Raises Price Target to $31
Wells Fargo Maintains Equal-Weight on Rocket Lab USA, Raises Price Target to $22
Citigroup Maintains Buy on Rocket Lab USA, Raises Price Target to $22
B of A Securities Maintains Buy on Rocket Lab USA, Raises Price Target to $30
Cantor Fitzgerald Maintains Overweight on Rocket Lab USA, Raises Price Target to $24