The Continued Ascent in Rocket Lab's Share Price
Following its recovery from last Thursday's unexpected selling spree, Rocket Lab (RKLB 8.15%) shares continued to climb for a third consecutive day during early Tuesday trade, increasing by 4.1% up until 10:10 a.m. ET. This upturn can be attributed to CEO Sir Peter Beck.
A strategically timed tweet
Last night, in New Zealand time (which implies it was an early morning post for them), Peter Beck, the CEO of Rocket Lab, posted a tweet on X expressing his joy over the company's new capability of mass-producing and shipping satellite components, specifically "reaction wheels", in large quantities, directly to their satellite manufacturing clients.
A pallet full of reaction wheels heading to a constellation customer. 🛰️ pic.twitter.com/Og3gVkcVuA
-- Peter Beck (@Peter_J_Beck) November 19, 2024
While this statement from the space company CEO might be a bit self-congratulatory, investors in Rocket Lab shares should nevertheless be gratified, for Beck is making a significant point.
Reasons to consider purchasing Rocket Lab stock -- if you decide to invest in Rocket Lab stock
As its name suggests, Rocket Lab specializes in rocket technology. Its Electron rockets lead in frequency of launches among all U.S. rockets, apart from SpaceX's Falcon 9, and they're planning to introduce a new Neutron medium-lift vehicle by 2025, which is expected to further accelerate the rate of launches. With each launch and sale, Rocket Lab's revenue grows, and its reputation flourishes.
Using data from S&P Global Market Intelligence, we discovered that Rocket Lab achieved only an 11% gross profit margin from its rocket launches last year. However, it managed to earn a remarkable 25% on the sales of its space systems, which encompass everything from spacecraft and satellites to even spacecraft parts sold to other satellite manufacturers.
Components like reaction wheels. And now, these earnings are coming in by the pallet-full.
Despite analysts' projections, Rocket Lab is not anticipated to record its first net profit until 2027. But the more reaction wheels, full satellites, and rocket launches Rocket Lab sells, the closer it will come to achieving profitability.
In light of Peter Beck's tweet celebrating Rocket Lab's capability to mass-produce and ship reaction wheels, investors might find interest in investing in the company's stock due to its increasing revenue and reputation. The finance sector should closely monitor Rocket Lab's progress, as every increase in rocket launches, satellite sales, and space component sales, like reaction wheels, brings the company closer to achieving profitability.
