Wall Street Thinks Rocket Lab Is a Buy. Here's Why I'm Not So Sure.
While the growth trajectory is appealing, Rocket Lab's path to profitability is lengthening.
Wall Street analysts have taken a bullish stance on Rocket Lab (NASDAQ: RKLB), rating the stock as a buy with an average price target of around $109 per share. However, this is significantly above the current trading price of approximately $64. The company recently reported impressive quarterly earnings, with revenue up by 62% year-over-year, its backlog surpassing $2.3 billion, and an overall positive momentum surrounding Rocket Lab.
Despite these encouraging numbers, the reporter expresses reservations about jumping on the bandwagon. The primary concern is Rocket Lab's inability to achieve profitability, with the situation seemingly worsening rather than improving. In its second-quarter earnings report, the company revealed a sharp increase in total operating expenses, rising from $142 million in the prior year to $274 million by the midpoint of the year.
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