Rocket Boost for Space Stocks: Will the Recovery Help Rocket Lab Soar?

The soaring of aerospace stocks during the COVID-19 pandemic was impressive, but the initial enthusiasm was quickly followed by cold disillusionment. Many companies that aimed to conquer the capital market through a stock market debut via SPAC mergers disappointed investors by failing to deliver the promised quick profits. The market responded promptly with drastic price drops, resulting in losses of up to 90% by early 2023. Now, in 2024, a turnaround seems to be on the horizon: some of the tough survivors of this selection process may be on the brink of profitability. Particularly in focus is Rocket Lab, an innovative company that originally started as a rocket manufacturer and has now evolved into a versatile player in the aerospace sector. Founded in 2006, Rocket Lab is known for building small Electron rockets that transport satellites weighing up to 300 kg into low Earth orbit. However, the company is not resting on its laurels. It is constantly expanding its range of offerings and is working on a reusable Neutron rocket, which could potentially challenge larger entities like SpaceX in the future. In addition to rockets, Rocket Lab is also involved in the manufacturing of solar arrays, guidance systems, and components for other satellites and rockets. The company has also developed complete Photon spacecraft, which function as orbital tug systems, and is even planning small space probes for missions to Mars and Venus. Thanks to this diversification, Rocket Lab's revenue surpassed $245 million last year and generated over $300 million in the first nine months of 2024 alone. Experts forecast that the company could double its revenue in 2025 and reach over $900 million by 2026. This would also be the first year Rocket Lab reports positive earnings based on generally accepted accounting principles (GAAP). Expected are earnings of $0.01 per share and a positive free cash flow of nearly $82 million – the beginning of a successful chapter. A look into the company's future shows its potential: by 2027, Rocket Lab's Neutron rocket could launch approximately five times annually, generating over $50 million per launch – a significant increase compared to the current $8.2 million per Electron launch.