Rocket Lab's Neutron Won't Launch Until 2027. Is the Stock a Buy 65% Below Its Record?
Management's schedule for positive adjusted EBITDA hinges on that first launch. Has the sell-off priced in the wait?
Rocket Lab, the company behind the Neutron rocket, has announced that the first launch of the medium-lift rocket will not occur this year, with a new expected launch date of 2027. This delay has caused the stock to drop by approximately 65% to around $53, over 65% below its May record close of $150.23. CEO Sir Peter Beck revealed that voids found in the carbon composite of a newly built forward dome for Neutron's first-stage propellant tank have led to another dome being manufactured with a reworked manufacturing process.
The company is currently focused on building and inspecting the new dome, followed by pressure and cryogenic tests before sharing a new launch date. Rocket Lab's revenue grew 62% year-over-year in the second quarter, reaching a record $234 million, and it expects third-quarter revenue to be between $250 million and $265 million.
However, the company remains unprofitable, with adjusted EBITDA and free cash flow both negative in the second quarter. With the pending purchase of Iridium Communications expected to close in mid-2027, Rocket Lab's financial outlook may improve, but the current stock price appears too high given the company's unproven profitability.
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