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Investing.com - Needham raised its price target on Rocket Lab USA (NASDAQ:RKLB) to $55.00 from $45.00 on Friday, while maintaining a Buy rating following the company’s strong second-quarter results. The stock, which has surged an impressive 827% over the past year according to InvestingPro data, is currently trading above its Fair Value estimate.
The space technology company reported revenue and adjusted EBITDA that exceeded consensus estimates by 7% and $1 million, respectively, while also providing third-quarter guidance above market expectations. InvestingPro data shows the company’s remarkable revenue growth of 65% over the last twelve months, though it remains unprofitable with an EBITDA of -$173 million.
Growth was driven by both the Space Systems segment, which increased 27% year-over-year, and the Launch segment, which surged 59% year-over-year. The company also impressed with non-GAAP gross margin expansion of 520 basis points compared to the same period last year.
Needham noted that management expressed increasing confidence in steady revenue growth and gross margin expansion, which the firm projects will drive non-GAAP operating margin to break-even by the fourth quarter of 2026. The company’s new Neutron rocket remains on schedule for a test launch by the end of 2025.
The research firm cited a global demand surge in New Space technology and market need for alternatives to SpaceX as creating significant opportunities for Rocket Lab, with substantial U.S. federal contracts potentially on the horizon.
In other recent news, Rocket Lab USA reported a record second-quarter 2025 revenue of $144.5 million, surpassing both its own forecast of $134.28 million and analyst estimates. Despite the impressive revenue figures, the company’s earnings per share recorded a loss of $0.13, which was below the expected loss of $0.09. Cantor Fitzgerald responded to Rocket Lab’s strong quarterly performance by raising its stock price target to $54, maintaining an Overweight rating. Similarly, KeyBanc Capital Markets increased its price target for Rocket Lab to $50, also retaining an Overweight rating. KeyBanc highlighted stronger margins than previously anticipated and expressed increased confidence in the Neutron rocket development program. Rocket Lab completed five successful Electron launches during the second quarter, contributing to a total of 69 launches to date. These developments reflect the company’s ongoing progress and expansion in the space sector.
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