TLDR
- Bank of America reiterated its Buy rating and $115 price target on Rocket Lab (RKLB), implying roughly 44% upside
- Q2 revenue came in at $234.1 million, up 62% year-over-year, slightly below the $237 million consensus
- Space Systems revenue nearly doubled to $189.5 million, well ahead of BofA’s $165 million estimate
- Rocket Lab posted a record $2.36 billion total backlog, up 137% from a year earlier
- Q3 revenue guidance of $250 million to $265 million came in above the $237 million Wall Street consensus
Rocket Lab reported Q2 revenue of $234.1 million, up 62% from $144.5 million a year earlier. The number came in just under the $237 million Bloomberg consensus, which weighed on the stock.
The drag came from the Launch Services segment, where revenue fell about 4% year-over-year to $44.6 million. That was the soft spot in an otherwise strong quarter.
Space Systems picked up the slack in a big way. Revenue there jumped to $189.5 million from $97.9 million a year earlier, driven by work on the Space Development Agency’s Tranche II and III programs and Rocket Lab’s spacecraft components business.
Bank of America had estimated $165 million for Space Systems. The actual result came in nearly $25 million ahead of that.
Record Backlog and a Big ATM Program
Rocket Lab ended the quarter with a record $2.36 billion total backlog, up 137% from a year ago. About 45% of that backlog is expected to be recognized as revenue over the next 12 months.
The company also secured more than $437 million in new launch contracts during and after the quarter, pushing its launch backlog above 90 missions.
On Aug. 13, Rocket Lab filed a replacement $1.94 billion at-the-market equity distribution program. The program carries forward the unsold balance from a prior May agreement and is designed to fund its pending acquisition of Iridium Communications and reduce debt.
The Hart-Scott-Rodino antitrust waiting period for the Iridium deal has expired, which removes a key regulatory hurdle.
GAAP net loss narrowed to $49.3 million from $66.4 million a year ago. Gross profit rose to $84.6 million from $46.4 million.
Adjusted EBITDA loss came in at $8.8 million, better than BofA’s $19.3 million estimate and the $22.1 million consensus.
Q3 Outlook and Neutron Update
Rocket Lab guided Q3 revenue of $250 million to $265 million. At the midpoint, that would represent about 66% year-over-year growth, above the $237 million consensus.
Q3 gross margin guidance of 29% to 31% is expected to face some pressure from sales of lower-margin satellite platforms.
On Neutron, Rocket Lab said production of the Stage 1 tank is on track to deliver the reusable medium-lift rocket to the launch pad in Q4 2026.
BofA maintained its $115 price target, based on a discounted cash flow model through 2045. The firm flagged production delays and Neutron development setbacks as downside risks.
The Wall Street consensus sits at a Strong Buy, with a mean price target of around $114, implying more than 40% upside from current levels. RKLB stock remains down roughly 45% from its year-to-date high.
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