Rocket Lab: Is It Finally Time to Buy Below $60?
The stock has been on an extended slide, and a recent setback further fueled the selling.
Rocket Lab shares have plummeted, trading under $60 after the company delayed the first launch of its Neutron rocket to 2027. The setback, caused by a propellant dome defect, might seem like a catastrophic failure, but it could actually present a buying opportunity for long-term investors. Neutron's heavier payload capacity would allow Rocket Lab to compete directly with SpaceX in the medium-lift payload market, which is crucial for satellite deployments and government contracts.
Rocket Lab's backlog has surged to $2.36 billion, a 137% increase from the previous year, and includes over 90 launches across its Electron, Neutron, and HASTE vehicles. Management expects to recognize about 45% of its backlog as revenue within the next year. While Neutron's delay is unfortunate, it doesn't erase the company's backlog or eliminate its potential to compete with SpaceX long-term.
Rocket Lab's current market cap of $35 billion, at a price-to-earnings ratio of roughly 27 times Wall Street's revenue estimates, makes it an attractive entry point for investors. This could be a prime opportunity for long-term investors who have been waiting for a compelling buy signal.
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