TLDR
- Rocket Lab stock rose 11.3%, hitting an intraday high of $123.94 after Needham raised its price target from $95 to $120 and kept a Buy rating.
- Cantor Fitzgerald also raised its price target to $96 from $85, citing stronger launch execution and a growing space portfolio.
- Q1 revenue came in at $200.35 million, up 63.4% year over year, beating the consensus estimate of $189.65 million.
- EPS matched expectations at -$0.07, and the company raised its Q2 guidance.
- The stock’s consensus rating stands at “Moderate Buy” with an average analyst price target of $91.79.
Rocket Lab USA (RKLB) surged 11.3% on Monday after Needham & Company lifted its price target on the stock from $95 to $120, maintaining its Buy rating.
The stock hit an intraday high of $123.94 before settling around $117.35. Volume reached roughly 53 million, more than double the average daily volume of 23.3 million.
The catalyst came on the heels of a strong first-quarter earnings report. Rocket Lab posted revenue of $200.35 million for Q1, beating the analyst consensus of $189.65 million and representing 63.4% growth year over year.
EPS came in at -$0.07, right in line with what Wall Street expected. A year ago, the company posted -$0.12 per share, showing a meaningful improvement in losses.
The company also raised its Q2 guidance, which helped reinforce the positive tone around the stock.
Analysts Back the Move
Cantor Fitzgerald joined the chorus, raising its price target to $96 from $85 while keeping an Overweight rating. The firm cited Rocket Lab’s launch execution and its diversified mix of services, including the Electron rocket, the Haste hypersonic test vehicle, and the upcoming Neutron program.
Stifel Nicolaus also reiterated a Buy rating and bumped its target to $105 from $90. Bank of America has a target of $120. Citigroup reiterated an Outperform rating on Friday.
Despite the bullish targets from several individual analysts, the consensus average price target sits at $91.79, well below where the stock is currently trading. That gap reflects how quickly the stock has moved.
Of the analysts covering RKLB, two have Strong Buy ratings, ten have Buy ratings, four hold a Hold, and one has a Sell.
Q1 Results and What Drove Them
Rocket Lab reported a negative return on equity of 11.72% and a net margin of -26.87%, standard territory for a growth-stage space company.
The Q1 beat was driven by strength in both launch services and spacecraft systems. Cantor pointed to the company’s dual launch infrastructure in New Zealand and the United States as a structural advantage.
Rocket Lab has a market cap of around $66.82 billion, a debt-to-equity ratio of just 0.02, and a current ratio of 4.47, suggesting a solid near-term liquidity position.
The 50-day moving average stands at $72.88, and the 200-day is at $68.50, both well below current trading levels.
Insiders have been selling. In the last 90 days, insiders offloaded roughly 233,449 shares worth over $16.4 million. SVP Arjun Kampani sold shares in early March at an average of $69.59, and Director Merline Saintil sold at $75.04. Insiders currently own around 8.4% of the company, with institutional investors holding 71.78%.
Analysts expect full-year EPS of -$0.22 for the current fiscal year.
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