Rocket Lab USA Inc. NASDAQ: RKLB shareholders recently saw RKLB stock hit a new 52-week high of $8.98 per share. As of this writing, it’s pulled back a little to $8.69 per share but is still one of the best-performing stocks in 2024 and over the last 12 months. Many analysts believe that RKLB stock is a long-term buy, but is this a stock for investors to chase at this price?
Rocket Lab USA Today$9.78 +1.09 (+12.54%) (As of 09/27/2024 ET)52-Week Range$3.47▼$10.29Price Target$6.25
Rocket Lab is one of the top names in the red-hot space economy. Many companies like Space-X and Rocket Lab aim to be an end-to-end space company that can help customers build the infrastructure needed to make space travel a common reality. Rocket Lab generates revenue from its launch business and its space services business, which account for about 70% of the company’s current revenue. Get Rocket Lab USA alerts:Sign Up
The bullish case can begin with the idea that Rocket Lab is still standing. That can’t be said for other companies in this space. However, it’s also important to note that the company isn’t turning a profit…yet. That makes it difficult to give the stock an accurate valuation.
Launch Activity Has the Stock Ready for Liftoff
The current reason for Rocket Lab’s stock’s performance comes from its product launches. On September 20, Rocket Lab successfully launched its 53rd Electron rocket. Electron is the company’s flagship product, designed for small satellite launches, for which there is massive demand. Rocket Lab estimates that by 2030, there will be demand for over 10,000 satellites to be launched.
The Electron is only the beginning. The company is also developing its Neutron rocket, which is designed to handle medium payloads. This will open a new revenue stream for the company.
That will be a key factor in addressing the one issue that could be holding Rocket Lab stock from going “to the moon.” That issue is the lack of profitability and negative free cash flow. This isn’t unusual for a company like Rocket Lab, which is still in the growth stage. The company’s proven track record will ensure that it will be able to borrow capital regardless of what’s happening with interest rates.
Don’t Discount the Short Interest Factor
RKLB stock has been one of the best-performing stocks over the last 12 months, climbing 103.3%. The stock is also up 55.8% in 2024, and investors who bought the dip in March have received an even larger gain.
Rocket Lab USA, Inc. (RKLB) Price Chart for Saturday, September, 28, 2024
Gains like that in an emerging growth stock like Rocket Lab brought out the short sellers. Short interest in RKLB stock is 18.7% of the float and has climbed 2.12% in the last 30 days. That means investors shouldn’t discount the idea that some of this recent rally may be due to short covering.
To support that thinking, on September 23, 2024, Cantor Fitzgerald reiterated its Overweight rating on RKLB stock and maintained its $7 price target. That’s above the consensus price target of $6.86, but it’s nearly 20% lower than the stock’s current price.
Moving Forward With RKLB Stock
Rocket Lab is one of the leading names among aerospace stocks, and there is a reason to believe it’s a long-term buy. However, it looks more than fairly valued at $8.82 per share, which is its price at the time of this writing. That said, if you were an investor in RKLB stock when it first went public, you may still be sitting on a loss. However, if you bought the stock after March 2022, you’re likely sitting on a profit.
Rocket Lab USA Stock Forecast Today12-Month Stock Price Forecast:$6.68-31.71% DownsideHoldBased on 9 Analyst RatingsHigh Forecast$11.00Average Forecast$6.68Low Forecast$4.25Rocket Lab USA Stock Forecast Details
If you’re approaching RKLB as a long-term investment, you could take some profit, but there’s nothing to suggest you should abandon your current approach. Holding RKLB stock and waiting for the next dip is a sound strategy.
Thirty days also nearly track with the company’s next earnings report on November 7. At that time, investors may better understand Rocket Lab’s path to profitability. Before you consider Rocket Lab USA, you’ll want to hear this.MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Rocket Lab USA wasn’t on the list.While Rocket Lab USA currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys.View The Five Stocks Here Which stocks are likely to thrive in today’s challenging market? Click the link below and we’ll send you MarketBeat’s list of ten stocks that will drive in any economic environment.Get This Free Report
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