Initial Ascent and subsequent Descent Experienced by Rocket Lab on Monday
Rocket Lab's (RKLB 2.10%) stock began its week on a high note, increasing by almost 6% on Monday, following news of a successful year-end rocket launch. This successful mission placed another Synthetic Aperture Radar (SAR) satellite from Synspective into Low Earth Orbit for the company. Subsequently, the stock fell back, and by 11 a.m. ET, all previous gains had been wiped out, leaving the stock with a minimal 0.1% increase.
Regardless, the stock has managed to surpass the $400 mark this year, leading some investors to speculate that Rocket Lab's growth might be slowing down for now.
Rocket Lab's 60% boost
Over the weekend, Rocket Lab announced its 16th successful launch of the year, marking a 60% improvement over last year's total of 10 launches. The launch took place from the company's primary site in New Zealand, deploying the sixth of their customer's reserved Synspective satellites into orbit.
Rocket Lab has maintained an exclusive contract to serve as Synspective's launch provider. This agreement guarantees that the remaining 10 launches can contribute significantly to Rocket Lab's annual revenue, which currently exceeds $360 million.
Shifting focus towards 2025
The year 2023 saw 10 launches, while 2024 saw a substantial increase to 16. As the clock strikes midnight on 2025, Rocket Lab's CEO, Sir Peter Beck, reveals plans to boost their launch frequency even further in the new year.
However, Beck has kept coy about the specifics, so it's unclear exactly how many launches to expect in 2025. He did mention that one launch will be a test for their eagerly anticipated Neutron medium-launch vehicle. With an impressive payload of 15 metric tons (in expendable configuration), the Neutron is expected to be around 50 times more capable than Rocket Lab's current Electron rocket. While it will cost $55 million, it is significantly less expensive than 7 times the Electron's price tag.
Wall Street analysts don't expect Neutron to immediately turn Rocket Lab profitable, but they anticipate profits may materialize as early as 2026. As investors in Rocket Lab continue to wait, they might look forward to potential 37% revenue growth in 2025 ($595 million in sales), along with a reduction in losses ($0.28 per share).
2024 was a triumph for Rocket Lab, but 2025 promises to be even more tantalizing.
In light of Rocket Lab's impressive 60% boost in launch successes, some investors are considering shifting their financing to invest further in the company, hoping to capitalize on potential future profits. With the anticipated launch of the Neutron medium-launch vehicle in 2025, Wall Street analysts forecast potential 37% revenue growth, reaching $595 million in sales, which may contribute to a reduction in losses.
