Baird initiates coverage on Rocket Lab stock with Outperform rating

Investing.com - Baird initiated coverage on Rocket Lab USA (NASDAQ:RKLB) with an Outperform rating and a price target of $83.00 on Thursday. The stock, currently trading at $69.27, appears overvalued according to InvestingPro Fair Value metrics.

The research firm cited Rocket Lab’s established position as a reliable space launch provider, pointing to its 94% mission success rate as evidence of the company’s operational capabilities. The company maintains strong financial health with a current ratio of 2.67, holding more cash than debt on its balance sheet.

Baird highlighted consensus revenue compound annual growth rate (CAGR) estimates of over 34% through 2030, which are expected to accelerate once the larger Neutron rocket enters the medium-lift market in late 2025 or early 2026.

The Neutron rocket will position Rocket Lab as a direct competitor to SpaceX’s Falcon 9 rocket in what Baird describes as the "highly-lucrative medium-lift market."

Baird’s $83 price target is based on 30 times its 2030 revenue estimate for Rocket Lab, with the firm noting longer-term potential for RKLB to become a "$200+ stock" if the company achieves solid launch cadence growth combined with reusable rocket technology development.

In other recent news, Rocket Lab Corporation has secured a contract for two dedicated Electron launches with the Japan Aerospace Exploration Agency (JAXA). These launches are part of JAXA’s Innovative Satellite Technology Demonstration Program, with the first mission planned for December 2025 to deploy the RApid Innovative payload demonstration SatellitE-4 (RAISE-4). Additionally, Rocket Lab has expanded its multi-launch agreement with the Japanese company Institute for Q-shu Pioneers of Space, Inc. (iQPS), increasing the total number of upcoming launches for iQPS to seven.

In another development, Rocket Lab announced it will launch the seventh StriX satellite for Synspective, a Japanese company, with the mission scheduled for October 14 UTC. This mission, named "Owl New World," will deploy Synspective’s new generation of Synthetic Aperture Radar (SAR) satellites. Furthermore, Veeco Instruments Inc. revealed that Rocket Lab has placed the first commercial multi-tool order for Veeco’s new Lumina+ MOCVD system. This purchase is part of Rocket Lab’s initiative to expand domestic production of compound semiconductor products under the Department of Commerce’s CHIPS and Science Act.

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