Rocket Lab (RKLB) Stock Is Up 800% In A Year. Is Now The Time To Buy?

Forbes

5 days ago

A lot hinges on Rocket Lab's ability to evolve its revenue model and reach sustained profitability.
Rocket Lab stock is in the stratosphere — skyrocketing 800% over the past year, propelled by a potent mix of explosive launch cadence, major contract wins and mounting anticipation around its upcoming Neutron rocket. Beyond fundamental strength, broader investor rotation into tariff-insulated aerospace names, and SpaceX-related political headwinds have turbocharged the rally. With sentiment now sky-high, the real question is: Can Rocket Lab keep climbing? Let's break down the key drivers, risks and whether it's still a buy.
Rocket Lab At A Glance
Rocket Lab has been feeding off investor excitement around the burgeoning space economy. Beyond offering reliable launch services for small satellites — significant in itself — Rocket Lab is deepening its moat by building an end-to-end space infrastructure platform. With its Electron rocket for small satellite launches, spacecraft platform, satellite components and on-orbit management solutions, Rocket Lab is targeting the full spectrum of the space value chain. This integrated approach strengthens its appeal for procuring large scale government and commercial contracts.
Rocket Lab operates through two core segments: launch services and space systems.
For the recent first quarter of 2025, space systems represented $87 million, or 70% of revenues, while launch services $35.6 million or 30%.
Rocket Lab's revenue has grown at a stellar pace of 7x, from $62.2 million in 2021 to $436.2 million in 2024, and is estimated to grow to $573.3 million in 2025, representing 31% year-on-year growth.
The company is not yet profitable and cash flows are negative. Cash and equivalents at the end of Q1 2025 was $517 million.
Backlog as of Q1 2025 was $1.067 billion with 60% attributed to the space systems segment and 40% to launch services. Commercial customers represented 54% of the backlog, while Government customers represented 46%. Rocket Lab expects about 56% of this backlog to be recognized within 12 months.
Key Drivers Behind Rocket Lab's 800% Stock Surge
Rocket Lab's 800% stock surge reflects a blend of recent execution and future potential. Neutron is the main narrative investors are buying into now, even if Rocket Lab's current fundamentals are still tied to Electron.
At the heart of Rocket Lab's next growth chapter is Neutron, its upcoming next-gen satellite launch vehicle that is central to its shift from small satellite missions to heavier payloads and high-value national security contracts. Neutron builds on the success of Electron, which has logged 3x more successful launches than all other American small launch providers combined over the past decade.
If successful, Neutron could emerge as the first credible challenger to SpaceX's Falcon 9 in the medium-lift launch market, breaking into a near-monopoly space and significantly expanding Rocket Lab's total addressable market. Investors already have a reason to be optimistic: The U.S. Space Force selected Rocket Lab to compete for high-priority, national security missions under its $5.6 billion National Security Space Launch (NSSL) program. Rocket Lab's launch vehicle for this program will be Neutron.
Meanwhile, Electron, which is the second most frequently launched U.S. rocket, remains Rocket Lab's workhorse. The company successfully launched its 68th Electron rocket (as of June 28) and also set a new launch turnaround record, with the mission being the second of two launches from the same launch site in less than 48 hours. In the first quarter of 2025, Electron achieved a 100% mission success rate, including an impressive, rapid turnaround of three launches in 13 days. This operational excellence continues to win trust and contracts for Electron missions. Rocket Lab sees commercial and government demand for 20+ Electron launches in 2025.
Rocket Lab's hypersonic test vehicle — HASTE (Hypersonic Accelerator Suborbital Test Electron) is seeing strong demand in the U.S., and beginning to gain traction internationally. Regular hypersonic flight tests are vital to advancing a nation's defense capabilities, and HASTE is playing a central role. Both The U.S and The United Kingdom have picked HASTE to develop sovereign hypersonic technology for their multibillion dollar defense programs. Rocket Lab is also a key subcontractor under Kratos Defense's flagship DoD program MACH‑TB 2.0, a $1.45 billion, five-year project to boost the U.S.'s hypersonic testing capabilities. With the latest launch award, Rocket Lab has now secured a total of seven HASTE missions for MACH-TB, underscoring its reliable launch cadence.
Critically, Rocket Lab's U.S.-based, non-China-linked ecosystem is a major asset in an era where national security, tech sovereignty and supply-chain resilience are top priorities. Although there is remarkable progress in the U.S.-China relations, geopolitical setups are never fully reliable and remain a wildcard. So, it is reassuring for investors to know that Rocket Lab is well aligned with Western defense and aerospace priorities.
The company sees its current backlog for Electron and HASTE to support a higher average selling price for missions for through 2025 vs. 2024, powering continued gross margin expansion. Non GAAP gross margin for the first quarter was 33.4%, above its guidance of 30% to 32%, and is seen expanding to 34% to 36% for the second quarter.
On June 30, 2025, Rocket Lab joined the Russell 1000 Growth Index, prompting a wave of passive fund rebalancing worth $200 billion as index-tracking ETFs snapped up RKLB shares. The stock is up 30% from its June 30, closing price of $35.77.
Is Rocket Lab A Buy?
Whether Rocket Lab stock will continue to rise, hinges on a successful Neutron launch, and seamless execution of its end-to-end space platform strategy.
So far, everything seems to be going right with Neutron. Neutron's inclusion in the Pentagon's $5.6 billion National Security Space Launch program is a validation of its strategic alignment with U.S. defense and space priorities, and a potential springboard into high-value defense missions.
Neutron is being designed for reuse and frequent launches, which is a critical advancement in space tech that the Department of Defense (DOD) appears highly supportive of. As an endorsement for Neutron's return-to-Earth capabilities, the U.S. Air Force Research Laboratory (AFRL) has selected Neutron for a mission that supports its broader initiative to explore point-to-point cargo transportation using commercial launch vehicles. The mission will focus on returning payloads to Earth, and is scheduled to fly no earlier than 2026.
Rocket Lab has signed a multi-launch agreement with an unnamed commercial satellite constellation operator, under which it will launch two dedicated missions on Neutron starting from mid-2026. The deal marks the start of what could become a larger collaboration, with Neutron likely to play a central role in launching the full constellation.
All this interest in Neutron from Government and private customers, while it is still in the pre-launch phase - ups the ante significantly.
Neutron has successfully completed its second stage qualification campaign — a major milestone that validates its design, operations and launch readiness for later this year. Rocket Lab said it conducted launch-like operations across the full stack, including flight software, hardware, avionics, and guidance, navigation and control systems. The stage was also proof-tested to more than 25% of its design load, including applying more than 1.3 million pounds of force and tension across the carbon composite structure.
Neutron's Stage 2 is a novel design compared to traditional rockets. Instead of being supported from the bottom, Stage 2 is suspended from the top of Stage 1's tank, enabling a very lightweight structure. Retiring the risk associated with this novel configuration early on was a strategic priority. Stage 2's structural design closely mirrors that of Stage 1, so this successful test campaign also helped de-risk critical elements of the first stage.
Per Rocket Lab's earnings call in May, Neutron Stage 2 is now going through final assembly and will be shipped to the launch site in the next few months in preparation for stage testing with the engine.
Neutron's Stage 1 upper module is also nearing completion. It integrates some of the most complex mechanical systems on the rocket, all of which are expected to perform seamlessly in testing.
While most of Neutron is assembled at Rocket Lab's facilities, the vehicle is shipped in segments to the Launch Complex 3 in Virginia, where it is integrated as a full rocket. The good news is construction at Launch Complex 3 is on schedule and nearing completion.
The challenge is the launch site — the Mid-Atlantic Regional Spaceport (MARS) on Wallops Island, Virginia — has limited maritime infrastructure, and access through the shallow Sloop Gut channel is possible only during favorable tides. Rocket Lab is exploring a workaround with plans for dredging the channel so barges can deliver the segments more reliably.
And yes, Rocket Lab still expects to launch Neutron in the second half of this year.
Can Rocket Lab Deliver On Its Full-Stack Space Ambitions?
Rocket Lab's plan to build an end-to-end space company is key to its ability to win large-value contracts, so it is imperative that the plans succeed.
A key part of this strategy is its pending acquisition of Mynaric, a German company specializing in laser-based satellite communication systems. The deal expands Rocket Lab's footprint into Europe, and provides access to European programs and growth opportunities.
The acquisition is a natural fit: Mynaric already supplies CONDOR Mk3 optical communication terminals to Rocket Lab under its $515 million Space Development Agency (SDA) contract to produce 18 satellites for the Tranche 2 Transport Layer-Beta. Mynaric is also involved in other SDA contracts and shares many clients with Rocket Lab spanning commercial constellation operators, prime contractors and defense and civil government agencies. Rocket Lab plans to scale production and improve efficiencies within Mynaric's manufacturing process, bolstering its ability to deliver optical terminals on time and on budget. The move should position Rocket Lab to support a broader range of future SDA and defense initiatives.
On the spacecraft side, Rocket Lab's Pioneer spacecraft has already launched three missions for Varda Space Industries, supporting in-space pharmaceutical manufacturing and rapid reentry operations. The third mission for Varda was launched within 15 days after the successful return of Varda's second mission, demonstrating Rocket Lab's ability to maintain high-cadence launch and reentry space missions. Meanwhile, integration and testing for a fourth and final Pioneer spacecraft is in the works.
New product launches like STARRAY, a plug and play, low-cost line of modular solar arrays to meet the power needs of satellites operating in any orbital conditions, are gaining traction with customers. Rocket Lab has also expanded its suite of Frontier satellite radios that are compatible with the industry's most important global ground stations.
The company has also launched the next generation versions of its popular MAX software packages for satellite guidance and control. Rocket Lab's MAX software supported the successful Moon landing of Firefly Aerospace's Blue Ghost Mission 1 earlier this year. The MAX software suite is also utilized in both NASA's CAPSTONE mission and DARPA's Blackjack program, as well as in Rocket Lab's own Pioneer spacecraft for its Varda missions.
So, the vertical integration plan appears to be proceeding smoothly.
As Rocket Lab gears up to compete on a larger scale, comparisons with industry giant SpaceX are inevitable.
How SpaceX Could Create Opportunity For Rocket Lab
SpaceX claims that it represents approximately 80% of the payload mass launched in orbit. Rocket Lab, by contrast, has focused on launching smaller satellites and payloads, but is aiming to facilitate bigger payloads with Neutron.
Neutron will be a few tons below the payload capacity of Space X's Falcon 9, but a Neutron launch is estimated to cost customers an estimated $50-55 million compared to the $67 million price tag for a Falcon 9 launch. On a per-kilogram basis, the cost is more-or-less the same for both. The company expects Neutron launch margins of approximately 50%, with the cost per Neutron launch estimated between $20 million and $25 million. Rocket Lab anticipates flying each reusable Neutron booster 10 to 20 times, comparable with the reuse cadence of a Falcon 9 booster.
Rocket Lab's Long-Term Outlook
For long-term, growth-oriented investors, Rocket Lab offers strong upside, subject to achieving key milestones.
Some catalysts include:
Steep valuation vs. opportunity: Bloomberg recently reported that SpaceX is preparing for an insider share sale that would value the company at around $400 billion, which is nearly 20x bigger than Rocket Lab's $22.5 billion market cap. Even with a modest narrowing of this enormous valuation gap, the potential upside for Rocket Lab stock could be substantial.
Neutron could unlock a larger total addressable market: If Neutron succeeds in the medium lift segment, Rocket Lab could unlock a sizable, multi-billion total addressable market over the next decade, paving the path to profitability and leaving room for further stock upside.
Minimal tariff exposure: Rocket Lab's Electron rockets are made in New Zealand and launched from there.
Very few of its Electron launches happen outside of New Zealand. So, the tariff exposure is minimal in its Electron launch business. Rocket Lab's Space Systems business is intensively domestically sourced. Most manufacturing happens in the U.S., and what is not manufactured in the U.S. still entails high U.S. involvement. Rocket Lab has its manufacturing intensity largely aligned to geographies with minimal tariff exposure. This factor is also key to procuring defense contracts ruled by national security concerns.
Rocket Lab Risks And Challenges
Bottom Line: Is Now A Good Time To Buy Rocket Lab?
Increasing launch cadence, a clear path to government-aligned revenue streams, a bold yet calculated bet on the Neutron rocket, strategic vertical integration and a growing backlog give Rocket Lab a foundation that many other space stocks still lack. This suggests that RKLB's 800% rally over the past year is not merely rooted in hype. That said, the stock's current valuation, with much of the investor optimism already priced in, leaves little room for missteps. A lot hinges on Rocket Lab's ability to evolve its revenue model and reach sustained profitability. At current levels, the stock has already hit the upper range of analyst price targets, making it more of a Hold than a Buy for now.