Rocket Lab (NASDAQ: RKLB) had one of the most promising bull runs in 2025 — until one announcement brought the stock crashing over 27% in a month.
Some investors think of Rocket Lab as “SpaceX-lite,” noting that it operates in the same ring (reusable rockets) but in different weight classes (SpaceX mostly does medium- to heavy-lift and mega-constellation launches, while Rocket Lab focuses on small-satellite launches).
Rocket Lab’s Neutron was set to change all that. The medium-lift rocket increases its payload mass to 13,000 kg for low Earth orbit (LEO), which makes it a viable alternative to SpaceX’s medium-lift clients that don’t necessarily need a full Falcon 9 experience.
Image source: Getty Images.
However, according to its third-quarter financials released on Nov. 10, Rocket Lab “updated” its Neutron launch schedule from the end of 2025 to the first quarter of 2026.
And I get it — delays like this can spook investors and shatter market confidence. However, for those silver-lining types, this downtrend actually presents a great entry opportunity for this growth stock. Here’s why.
First, let’s delve into the third-quarter financials. Rocket Lab secured 17 Electron launch contracts in just the third quarter, with the Electron being its small-lift rocket. For reference, Rocket Lab had only 12 Electron launches across the entire nine-month period of 2024, right around this time last year. That shows massive scaling.
The company also reported impressive 48% top-line growth to a record $155 million. Gross margin (on a GAAP basis) also improved to 37%. It did report higher revenue and R&D costs for this quarter, though it was mostly offset by certain tax benefits. As a result, net losses were lower at $0.03 per share.
CEO Sir Peter Beck also stated that the company has a “$1.05 billion backlog,” which indicates strong demand and a solid foundation for future revenue growth. On top of that, it announced a new federal defense contract for its Neutron rocket and Archimedes reusable engine development with the U.S. Air Force’s Research Laboratory.
Together with other previous agreements with the U.S. and U.K., this proves Rocket Lab has an increasingly viable on-ramp to bigger defense contracts.
As mentioned earlier, Rocket Lab announced a delay in the Neutron launch in its latest financials. And though the stock was already in a slight downturn by Nov. 10, the announcement sent it plummeting from around $52 to $39. That said, we’re already seeing some recovery, with Rocket Lab stock trading at around the high end of $47 today.
Still, at current prices, the stock trades at over 36 times revenue (price-to-sales ratio). That’s quite a premium — exceedingly and prohibitively so for some. However, this premium can be justified if Rocket Lab maintains its growth cadence, especially if it converts a good chunk of its backlog into recurring revenue. Fourth-quarter revenue is already expected to come in between $170 million and $180 million, representing notable sequential and annual growth.
And lastly, the company operates in a sector with a potential total addressable market of $10 billion by 2030. If it can capture and maintain a decent slice of that pie, we may be looking at a multibillion-dollar growth story in the making.
A consensus among 15 analysts rates Rocket Lab stock a moderate buy with an average score of 4.13, up from 4.07 two months ago. That means despite the Neutron delay, Wall Street is scoring Rocket Lab higher, highlighting its strong growth potential despite short-term headwinds. The high target price is $83, which suggests about 77% potential upside in the stock over the next year.
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Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
