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Friday - Needham has initiated coverage on Rocket Lab USA (NASDAQ:RKLB) with a Buy rating and a price target of $28.00, representing potential upside from the current price of $21.88. The stock has shown remarkable momentum, surging nearly 500% over the past year. The firm sees Rocket Lab as a disruptive force in the rapidly evolving space industry, citing its deep vertical integration as a key differentiator that positions the company to compete with industry leader SpaceX. According to InvestingPro, analysts maintain a bullish consensus with price targets ranging from $14.35 to $33.00.
Rocket Lab’s Space Systems segment, which provides complete satellite buses and subsystems, is experiencing significant growth thanks to increasing government and commercial launches into low Earth orbit (LEO). The company has demonstrated strong revenue growth of 78.34% in the last twelve months, reaching $436.21 million. This sector’s profits are instrumental in funding Rocket Lab’s Launch business. The company’s Electron rocket has already proven itself in the small-lift category with over 60 successful missions.
The analyst at Needham highlighted the maturity of the Electron program and the upcoming medium-lift Neutron rocket, which is poised to begin commercial missions in calendar year 2026 (C26). Neutron’s reusability is a key feature that is expected to be a game-changer for the company.
Rocket Lab’s progress with the Electron and the anticipated success of Neutron are projected to significantly enhance the company’s financial performance. Needham anticipates that victories against SpaceX and successful Neutron launches will lead to substantial improvements in revenue, earnings, and cash flow starting in C26.
In other recent news, Rocket Lab USA, Inc. has been actively involved in securing significant contracts and developing its launch capabilities. The company has been selected for two major government programs aimed at advancing hypersonic technologies: the U.S. Air Force’s $46 billion Enterprise-Wide Agile Acquisition Contract (EWAAC) and the UK Ministry of Defence’s Hypersonic Technologies & Capability Development Framework (HTCDF), valued at $1.3 billion. Rocket Lab plans to utilize its Hypersonic Accelerator Suborbital Test Electron (HASTE) launch vehicle in these programs, which could secure long-term government contracts extending through 2031. Stifel analysts have reiterated a Buy rating with a $27 price target, highlighting these developments as pivotal for Rocket Lab’s launch business.
Additionally, Cantor Fitzgerald maintains an Overweight rating and a $24 price target, noting Rocket Lab’s Neutron launch vehicle as a potential competitor to SpaceX’s Falcon 9. Rocket Lab’s proprietary launchpads offer flexibility, and the company has completed over 60 successful missions. The Neutron Rocket’s construction is on schedule for completion with an initial launch expected by late 2025. These advancements position Rocket Lab for potential growth in the aerospace sector, particularly as it expands its launch capabilities and government contract base.
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