Rocket Lab (NASDAQ: RKLB), a developer of reusable orbital rockets, went public through a merger with a special-purpose acquisition company (SPAC) on Aug. 25, 2021. It started trading at $11.58 on the first day, but it now trades at about $64. Let's see why this space stock skyrocketed over the past five years -- and why its next earnings report could drive it higher.
Rocket Lab is best known for its Electron rockets, which the company has launched 94 times to deploy over 265 satellites, and its upcoming, higher-capacity Neutron rocket. Its big launch customers include NASA, the U.S. Space Force, and the Swedish National Space Agency. It also launches HASTE (Hypersonic Accelerator Suborbital Test Electron), a customized rocket that helps the U.S. Department of Defense test hypersonic and suborbital technologies.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
However, those launch services typically account for only 25%-30% of Rocket Lab's total revenue. More than 70% comes from its space systems segment, which develops satellite components, satellite buses, and solar panels for a wide range of customers.
It's also in the process of acquiring Iridium (NASDAQ: IRDM), a developer of satellite networks for critical communications, in an $8 billion deal that is expected to close next year. It will expand its space systems segment and be "significantly accretive" to its cash flow and profitability.
At first glance, Rocket Lab might seem like a weaker space play than SpaceX (NASDAQ: SPCX), which also produces orbital rockets and satellites. However, Rocket Lab's rockets handle smaller payloads than SpaceX's Falcon rockets, its HASTE launch vehicles have cornered the market for suborbital hypersonic tests, and Iridium doesn't directly compete against SpaceX's Starlink. Therefore, there could be ample room for Rocket Lab and SpaceX to expand in the nascent space sector without clashing.
From 2025 to 2028, analysts expect Rocket Lab's revenue to grow at a 43% CAGR from $602 million to $1.78 billion. They expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive in 2027 and more than double to $272 million in 2028. With an enterprise value of $12.7 billion, it isn't cheap at 27 times next year's sales. But if you're looking for a smaller, simpler play on rockets and satellites than SpaceX -- which is burdened by a money-burning AI business -- Rocket Lab checks all the right boxes. That's why I'd keep an eye out for its next earnings report in early November.
Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this.
On rare occasions, our expert team of analysts issues a "Double Down" stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $582,768!*
Apple: if you invested $1,000 when we doubled down in 2008, you'd have $61,989!*
Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $446,157!*
Right now, we're issuing "Double Down" alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of August 3, 2026
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
1 Monster Space Stock I'm Watching This Upcoming Earnings Season was originally published by The Motley Fool