Rocket Lab's Backlog Is $2.36 Billion -- More Than Double Its 2026 Revenue -- and the Stock Still Fell 38% This Month. Here's the Disconnect.
Investors had to know this day was coming sooner or later.
In July, Rocket Lab's backlog reached $2.36 billion, nearly double its anticipated revenue of $959 million for the year. The company has successfully launched multiple Electron rockets, demonstrating its capability to place smaller satellites into orbit. However, the stock has experienced a 38% decline this month, leaving it 16% below its 2025 closing price despite a strong midyear performance.
This situation highlights that companies with a strong narrative can perform well for a limited time, but it's challenging to maintain such momentum. Rocket Lab's Electron rocket has been flown 98 times, and its satellite technology services now account for about two-thirds of its business. Despite this, developmental delays in the medium-lift Neutron rocket, which is expected to launch next year, have led to significant investor concerns.
The stock's current price is based on 40 times the company's projected sales, not earnings. This level of valuation is not typical for more established companies and suggests that investors are looking for long-term growth potential that may not materialize soon. The market's realization of Rocket Lab's profitless status is negatively impacting its stock price.
While there is still some story value for speculative investors, it becomes increasingly difficult to maintain such performance as time goes on.
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