KeyBanc maintains Overweight rating on Rocket Lab USA stock amid growth

Investing.com - KeyBanc Capital Markets maintained its Overweight rating and $75.00 price target on Rocket Lab USA (NASDAQ:RKLB) stock following the company’s recent earnings report. The space company, currently valued at $27.37 billion, has seen its stock surge 249.52% over the past year despite recent weakness.

The investment firm cited continued margin strength and top-line growth in Rocket Lab’s core business, which offset a modest delay in the company’s Neutron rocket program development. InvestingPro data shows impressive revenue growth of 52.42% over the last twelve months, with a healthy gross profit margin of 31.7%.

KeyBanc highlighted Rocket Lab’s strong cash position, noting it supports both organic growth initiatives and potential mergers and acquisitions to further vertically integrate the company’s operations. This assessment aligns with InvestingPro data showing a robust current ratio of 3.18, indicating liquid assets significantly exceed short-term obligations.

The firm stated that Rocket Lab remains on track to follow "a similarly aggressive growth trajectory as SpaceX" in the space industry.

KeyBanc believes Rocket Lab is positioned to become an industry leader across multiple segments, including launch services, satellite manufacturing and design, and eventually satellite constellations.

In other recent news, Rocket Lab USA reported strong third-quarter earnings, with revenue reaching $155.1 million, a 48% year-over-year increase that surpassed the consensus estimate of $151.9 million. Despite this revenue growth, the company faced an adjusted EBITDA loss of $26.3 million, which was larger than the expected $22.0 million loss. The Space Systems and Launch segments saw significant growth, with year-over-year increases of 36% and 95%, respectively. Analysts have responded to these results with various adjustments to Rocket Lab’s stock price targets. Needham raised its price target to $63, citing strong quarterly performance and improved gross margins. Roth/MKM and Stifel both increased their targets to $75, highlighting stronger margins and a growing backlog. Cantor Fitzgerald also raised its target to $72, emphasizing the potential of Rocket Lab’s upcoming Neutron launch vehicle. Citizens, however, maintained a Market Perform rating, reflecting a more cautious outlook.

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