Stifel raises Rocket Lab stock target to $34, maintains buy rating

On Wednesday, Stifel analysts increased the price target for Rocket Lab USA (NASDAQ:RKLB) shares to $34 from the previous target of $29, while continuing to recommend a Buy rating for the stock. The stock, currently trading at $28.76 with a market capitalization of $13.27 billion, has shown remarkable momentum with a 555% return over the past year. According to InvestingPro analysis, the stock’s RSI indicates overbought territory, suggesting investors should monitor entry points carefully. This adjustment comes in the wake of Rocket Lab’s announcement of its plans to acquire Geost, LLC, a company specializing in the development and manufacturing of electro-optical and infrared payloads for national security satellites.

The acquisition deal, valued at $275 million, comprises $125 million in cash and $150 million in privately placed Rocket Lab shares, with an additional earnout of up to $50 million based on revenue targets. The transaction is slated for completion early in the second half of 2025, pending regulatory approval and customary closing conditions. Both companies’ boards have already sanctioned the agreement. With a healthy current ratio of 2.08 and impressive revenue growth of 65% in the last twelve months, Rocket Lab appears well-positioned to execute this strategic move. For deeper insights into Rocket Lab’s financial health and growth prospects, InvestingPro subscribers have access to over 15 additional exclusive ProTips and comprehensive analysis.

Rocket Lab’s management anticipates that the acquisition will have a neutral to slightly positive impact on the company’s adjusted EBITDA during the latter half of 2025. Although specific GAAP financial details were not disclosed, the strategic move is expected to allow Rocket Lab to penetrate the satellite payload market, thereby positioning the firm as a potential disruptor in the national security space sector. InvestingPro data shows the company operates with moderate debt levels and maintains liquid assets exceeding short-term obligations, providing financial flexibility for strategic initiatives like this acquisition.

Stifel’s commentary highlighted the strategic benefits of the acquisition for Rocket Lab, noting the company’s entry into a new market segment and the potential to become a significant player in national security space applications. The firm’s analysts are optimistic about the deal’s contribution to Rocket Lab’s growth trajectory and its alignment with the company’s broader strategic objectives.

In other recent news, Rocket Lab USA, Inc. has announced the acquisition of Geost, LLC for $275 million, comprising cash and Rocket Lab common stock, with an additional earnout potential based on revenue targets. This acquisition is expected to enhance Rocket Lab’s capabilities in the satellite payload sector, aligning with the U.S. Department of Defense’s objectives. The transaction is anticipated to close in the second half of 2025, pending regulatory approval. Additionally, Rocket Lab has completed a corporate reorganization, becoming a wholly owned subsidiary of Rocket Lab Corporation, a move designed to streamline operations without affecting stock trading.

In a separate development, Rocket Lab has been selected by NASA to launch the Aspera mission in 2026, focusing on galaxy formation and cosmic evolution, using its Electron rocket. This continues Rocket Lab’s history of supporting NASA missions. Furthermore, Rocket Lab successfully completed two Earth return missions within two months, showcasing its rapid re-entry capabilities and solidifying its position in the space industry. The company is also preparing the fourth spacecraft in Varda’s W-series, continuing its partnership with Varda Space Industries.

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