TLDR
- Piper Sandler initiated coverage on Rocket Lab (RKLB) with a Neutral rating and an $83 price target
- The stock is trading around $66–$76, down sharply, and is flagged as overvalued relative to Fair Value
- CEO Peter Beck sold 1.3 million shares on July 7 at $84.92 under a pre-arranged 10b5-1 plan
- Revenue for the latest quarter was up 63.4% year over year to $200.35 million, beating estimates
- Morgan Stanley holds an Overweight rating with a $105 price target; consensus sits at $110.18
Rocket Lab (RKLB) is having a rough week. The stock dropped roughly 13% and is now trading around $66, well below its 12-month high of $151.
Piper Sandler kicked off coverage Wednesday with a Neutral rating and an $83 price target. The firm based that target on 39 times fiscal year 2027 enterprise value to revenue.
Rocket Lab’s current market cap sits at around $41.5–$44 billion. InvestingPro flags the stock as overvalued relative to its Fair Value, with a Price/Book ratio of 18.88.
The stock trades at a premium to SpaceX on an enterprise value to revenue basis. Piper Sandler expects that valuation relationship to hold over the coming year.
Despite the premium, RKLB has delivered a 59.78% return over the past 12 months and grown revenue 45.83% over the same period. That’s a business moving fast.
Strong Financials, But Questions Remain
The most recent quarterly results were solid. Revenue came in at $200.35 million for Q1, up 63.4% year over year and above the analyst estimate of $189.65 million.
EPS came in at -$0.07, matching consensus. Analysts expect full-year EPS of -$0.26.
The company completed a full-duration Neutron engine test, a key step before the larger rocket’s first launch. That milestone was well received.
Rocket Lab also recently closed an $8 billion deal to acquire Iridium Communications. Morgan Stanley reiterated its Overweight rating following that news, with a $105 price target.
Cantor Fitzgerald also kept its Overweight rating after the successful U.S. Space Force VICTUS HAZE mission, setting a price target of $96.
CEO Share Sales Raise Eyebrows
CEO Peter Beck sold 1,298,622 shares on July 7 at an average price of $84.92, totaling over $110 million. The transaction was made under a pre-arranged Rule 10b5-1 plan.
Beck still holds 2,715,181 shares valued at roughly $230 million after the sale.
In total, insiders have sold 3,849,294 shares worth approximately $362.8 million over the past three months. All trades were made under 10b5-1 plans.
Calamos Advisors also cut its RKLB position by 90.1% in Q1, trimming from 245,980 to 24,393 shares worth about $1.57 million.
Institutional investors still own 71.78% of the stock.
The stock’s 50-day moving average is $108.95 and its 200-day moving average is $87.31. RKLB is trading well below both levels.
The analyst consensus rating is Moderate Buy with an average price target of $110.18. Wells Fargo has the most conservative target at $60, while New Street Research has a Buy with a $150 target.
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