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Rocket Lab: Not Priced For Launch Delays

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  • Rocket Lab Corporation boasts robust business momentum but trades at an aggressively high valuation, unsupported by Neutron rocket testing delays.
  • The company announced a big $2.36B backlog with $1B+ in new contracts, highlighting the strong business climate in the space sector.
  • RKLB’s planned $8B Iridium acquisition requires heavy equity issuance, adding dilution risk while integration and growth benefits remain years away.
  • With a 50x sales multiple, 40% gross margins, and slowing pro forma growth, RKLB’s stock price remains disconnected from realistic growth and profitability timelines.
Rocket Lab Corporation (RKLB) remains a great example of a strong business mismatched with an aggressively priced equity valuation. Most investors view a stock trading in lockstep with revenue or earnings growth, but the current valuation of Rocket Lab requires years of execution to warrant this price. My investment thesis remains bearish on the stock after the company disclosed a major delay in their key medium-duty rocket launch program.


Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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