Recently, analysts at Morgan Stanley had positive things to say about space company Rocket Lab (RKLB). Morgan Stanley analyst Kristine Liwag noted the elevated interest in the space stock this year, as well as the lack of pure-play, high-performing stocks in the space.
Morgan Stanley analysts think the company could rival SpaceX by boosting rocket lift capacity and embracing booster reusability. The company’s Electron launches also position it for further growth. The firm assigned a $68 price target to the stock, implying 5% potential upside from current levels.
With that in mind, let’s take a closer look at Rocket Lab and RKLB stock.
Founded in 2006 and headquartered in Long Beach, California, Rocket Lab is a leading aerospace manufacturer and launch service provider. The company specializes in designing, building, and launching lightweight rockets, particularly its Electron vehicle, which is widely used for deploying small satellites into orbit.
Rocket Lab supports a range of missions for commercial, government, and scientific clients while developing larger rockets, such as the Neutron. With a focus on innovation and cost-effective access to space, Rocket Lab operates multiple launch sites and offers end-to-end space solutions, including satellite manufacturing and mission management. The company has a market capitalization of $30.7 billion.
RKLB stock has skyrocketed over the past year due to robust growth in its operations and revenue. The company also manages a substantial backlog. Over the past 52 weeks, shares are up 486%, while they have gained 158% year-to-date (YTD). The stock reached a 52-week high of $73.97 on Oct. 15, not long after the company has announced that it signed a direct contract with the Japan Aerospace Exploration Agency (JAXA) for two Electron launches.
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With a skyrocketing stock comes an eye-watering valuation, however. Rocket Lab’s price-to-sales ratio is 67.19, which is considerably higher than the industry average.
On Aug. 7, Rocket Lab reported its second-quarter results for fiscal 2025. Revenue increased 36% year-over-year (YOY) to a record $144.5 million. The company’s product revenues increased 28% YOY, while its service revenues climbed by 52% annually. In fact, Rocket Lab has a solid track record of revenue growth. Between 2021 and 2024, its annual revenues climbed from $62.24 million to $436.21 million.
Rocket Labs also took some notable operational strides during the quarter. In August, the company officially opened its Launch Complex 3 for its reusable rocket, Neutron. In the same month, the firm also closed the acquisition of Geost, an electro-optical and infrared (EO/IR) sensor systems developer. Rocket Labs also launched five Electron missions during the quarter.
On the other hand, Rocket Lab’s bottom line is still in the red. Its operating loss increased from $43.27 million in Q2 2024 to $59.64 million in Q2 2025. The company’s net loss per share increased from $0.08 to $0.13 over the same period.
For the third quarter, Rocket Lab expects its revenue to be in the range of $145 million to $155 million. Non-GAAP gross margin is projected to be in the range of 39% to 41%.
Wall Street analysts are optimistic that Rocket Lab will recover some of its losses. They expect the company’s loss to decline by 10% YOY to $0.09 for the third quarter. However, for the current fiscal year, loss per share is projected to increase 3% annually to $0.39. On the other hand, for the next fiscal year, loss per share is projected to improve by 20% to $0.31.
Apart from Morgan Stanley, other Wall Street analysts are also optimistic about Rocket Lab’s future. In September, Needham analyst Ryan Koontz reiterated a “Buy” rating with a $55 price target. Koontz highlighted the company’s opening of Launch Complex 3 as an essential milestone in its Neutron program.
In October, Cantor Fitzgerald analyst Andres Sheppard reiterated a “Buy” rating with a $54 price target. Analysts at KeyBanc maintained an “Overweight” rating on Rocket Lab, while raising the price target from $40 to $50, expressing confidence in the company’s strong cash position.
Wall Street analysts are soundly bullish about Rocket Lab’s prospects, with analysts awarding it a consensus “Moderate Buy” rating overall. Of the 15 analysts rating the stock, a majority of eight analysts rate it a “Strong Buy,” one analyst suggests a “Moderate Buy,” and six analysts play it safe with a “Hold” rating. The consensus price target of $58.67 represents 9% downside from current levels, but the Street-high target of $83 suggests 28% potential upside from here.
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On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
