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Investing.com -- Rocket Lab USA (NASDAQ:RKLB) stock rose 8% Monday morning after Citi analyst Jason Gursky raised his price target on the space company to $50 from $33, maintaining a Buy rating.
The new target represents the highest on Wall Street for Rocket Lab, which specializes in launch services and satellite systems. Gursky’s bullish outlook stems from shifting his valuation methodology to reflect the company’s 2029 revenue potential, which he projects will reach approximately $2.6 billion.
In his analysis, Gursky highlighted several key areas to watch, including progress updates on Rocket Lab’s Neutron rocket development, potential Department of Defense announcements, and the company’s ability to secure additional launch opportunities.
The analyst expects Rocket Lab’s future growth to be driven by about 20 Neutron launches per year and increased satellite construction wins, particularly from U.S. government programs. His model also incorporates approximately $50 million in annual revenues from the Geost acquisition, which is expected to close in the second half of 2025.
Gursky’s valuation applies a 15x revenue multiple to derive a target of roughly $72, which he then discounts back at Rocket Lab’s weighted average cost of capital of 13% to arrive at the 12-month price target of $50.
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