We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Rocket Lab Stock Rallies 34.8% in 3 Months: Hold Tight or Book Profits?
Read MoreHide Full Article
Key Takeaways
RKLB faces customer concentration, launch execution and government spending risks.
Premium valuation, weaker earnings estimates and negative ROIC may limit near-term appeal.
Rocket Lab benefits from NASA and U.S. Space Force awards that expand its civil and defense portfolio.
Rocket Lab Corporation (RKLB - Free Report) shares have risen 34.8% over the past three months, outperforming the Zacks Aerospace-Defense Equipment industry’s growth of 10.7%. The company is strengthening its position through new government mission awards, rising defense demand and an expanding integrated space systems business, supporting long-term growth.
Image Source: Zacks Investment Research
Meanwhile, stocks like Curtiss-Wright Corporation (CW - Free Report) and TransDigm Group Inc. (TDG - Free Report) have underperformed the industry during the same period. Shares of CW and TDG have risen 8.8% and 10.3%, respectively.
With RKLB shares rallying strongly over the past three months, investors may be wondering whether the stock still has room to run. Let's examine the factors and assess the stock's investment prospects to make an informed decision.
Risks to RKLB's Growth
Rocket Lab remains exposed to customer concentration and government spending risks, as a significant portion of its launch and space systems revenues is generated from U.S. government agencies and defense-related programs. Any reduction in government budgets, contract delays, funding shifts or changes in procurement priorities could affect future order flow and revenue visibility. The company also faces the risk of contract modifications or cancellations, particularly for long-duration government programs.
Rocket Lab operates in a highly competitive and capital-intensive industry that requires continued investment in research, manufacturing and infrastructure. The company must consistently innovate to maintain its technological edge while managing rising operating costs. At the same time, increasing competition from established launch providers and emerging space companies could intensify pricing pressure, reduce market share opportunities and weigh on long-term profitability.
Rocket Lab's business also depends on the successful execution of complex launch missions and spacecraft operations, where technical failures, launch delays or mission anomalies could affect customer confidence and future demand. Although the company has built a strong launch track record, any significant operational setback could increase costs, delay customer programs and adversely impact its reputation and long-term financial performance.
Factors Supporting RKLB's Growth
Rocket Lab continues to strengthen its position in the government space market through new mission awards and long-term defense programs. In June 2026, NASA selected the company to launch two Sun-Earth science missions aboard Electron, reinforcing Rocket Lab's reputation as a trusted launch provider for complex scientific payloads. The award further expands its civil space portfolio while supporting a steady pipeline of future launch opportunities.
The company is also benefiting from the rising demand for national security space capabilities. In May 2026, Rocket Lab secured a $90-million contract from the U.S. Space Force to design and build two Geostationary Earth Orbit satellites equipped with space domain awareness payloads. The program expands the company's role beyond launch services into higher-value spacecraft manufacturing and strengthens its presence in the rapidly growing defense space market.
Earnings Estimates for RKLB Stock
The Zacks Consensus Estimate for RKLB’s 2026 earnings per share (EPS) indicates a decline of 20% over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Curtiss-Wright’s 2026 EPS calls for a rise of 0.73% in the past 60 days. The estimate for TransDigm Group’s fiscal 2026 EPS implies an increase of 1.68% over the same period.
RKLB Stock’s Poor ROIC
The image below shows that RKLB stock’s trailing 12-month return on invested capital (ROIC) not only lags the peer group’s average return but also reflects a negative figure. This suggests that the company's investments are not yielding sufficient returns to cover its expenses.
Image Source: Zacks Investment Research
Liquidity Position of RKLB
RKLB has a current ratio of 4.48 compared with its industry’s average of 2.36. The ratio, being more than one, indicates that RKLB possesses sufficient capital to pay off its short-term debt obligations.
Image Source: Zacks Investment Research
Its industry peers, Curtiss-Wright and TransDigm Group, also maintain current ratios above one. CW has a current ratio of 1.52, while TDG holds 3.52.
RKLB Stock Trades at a Premium
Rocket Lab is currently trading at 48.96X, a premium compared to its industry’s 14.52X on a forward 12-month Price/Sales basis.
Image Source: Zacks Investment Research
What Should an Investor Do?
Despite benefiting from new government mission awards and growing defense opportunities, Rocket Lab continues to face risks related to customer concentration, government spending, intense competition and execution of complex launch missions. The stock has outperformed the industry in recent months and continues to trade at a significant premium to peers. At the same time, weakening earnings estimates and a negative ROIC indicate that Rocket Lab's investments have not yet translated into consistent profitability. Given these factors, investors may consider avoiding the stock at current levels.
View the Zacks #1 Rank List
Image: Bigstock
Rocket Lab Stock Rallies 34.8% in 3 Months: Hold Tight or Book Profits?
Key Takeaways
Rocket Lab Corporation (RKLB - Free Report) shares have risen 34.8% over the past three months, outperforming the Zacks Aerospace-Defense Equipment industry’s growth of 10.7%. The company is strengthening its position through new government mission awards, rising defense demand and an expanding integrated space systems business, supporting long-term growth.
Image Source: Zacks Investment Research
Meanwhile, stocks like Curtiss-Wright Corporation (CW - Free Report) and TransDigm Group Inc. (TDG - Free Report) have underperformed the industry during the same period. Shares of CW and TDG have risen 8.8% and 10.3%, respectively.
With RKLB shares rallying strongly over the past three months, investors may be wondering whether the stock still has room to run. Let's examine the factors and assess the stock's investment prospects to make an informed decision.
Risks to RKLB's Growth
Rocket Lab remains exposed to customer concentration and government spending risks, as a significant portion of its launch and space systems revenues is generated from U.S. government agencies and defense-related programs. Any reduction in government budgets, contract delays, funding shifts or changes in procurement priorities could affect future order flow and revenue visibility. The company also faces the risk of contract modifications or cancellations, particularly for long-duration government programs.
Rocket Lab operates in a highly competitive and capital-intensive industry that requires continued investment in research, manufacturing and infrastructure. The company must consistently innovate to maintain its technological edge while managing rising operating costs. At the same time, increasing competition from established launch providers and emerging space companies could intensify pricing pressure, reduce market share opportunities and weigh on long-term profitability.
Rocket Lab's business also depends on the successful execution of complex launch missions and spacecraft operations, where technical failures, launch delays or mission anomalies could affect customer confidence and future demand. Although the company has built a strong launch track record, any significant operational setback could increase costs, delay customer programs and adversely impact its reputation and long-term financial performance.
Factors Supporting RKLB's Growth
Rocket Lab continues to strengthen its position in the government space market through new mission awards and long-term defense programs. In June 2026, NASA selected the company to launch two Sun-Earth science missions aboard Electron, reinforcing Rocket Lab's reputation as a trusted launch provider for complex scientific payloads. The award further expands its civil space portfolio while supporting a steady pipeline of future launch opportunities.
The company is also benefiting from the rising demand for national security space capabilities. In May 2026, Rocket Lab secured a $90-million contract from the U.S. Space Force to design and build two Geostationary Earth Orbit satellites equipped with space domain awareness payloads. The program expands the company's role beyond launch services into higher-value spacecraft manufacturing and strengthens its presence in the rapidly growing defense space market.
Earnings Estimates for RKLB Stock
The Zacks Consensus Estimate for RKLB’s 2026 earnings per share (EPS) indicates a decline of 20% over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Curtiss-Wright’s 2026 EPS calls for a rise of 0.73% in the past 60 days. The estimate for TransDigm Group’s fiscal 2026 EPS implies an increase of 1.68% over the same period.
RKLB Stock’s Poor ROIC
The image below shows that RKLB stock’s trailing 12-month return on invested capital (ROIC) not only lags the peer group’s average return but also reflects a negative figure. This suggests that the company's investments are not yielding sufficient returns to cover its expenses.
Image Source: Zacks Investment Research
Liquidity Position of RKLB
RKLB has a current ratio of 4.48 compared with its industry’s average of 2.36. The ratio, being more than one, indicates that RKLB possesses sufficient capital to pay off its short-term debt obligations.
Image Source: Zacks Investment Research
Its industry peers, Curtiss-Wright and TransDigm Group, also maintain current ratios above one. CW has a current ratio of 1.52, while TDG holds 3.52.
RKLB Stock Trades at a Premium
Rocket Lab is currently trading at 48.96X, a premium compared to its industry’s 14.52X on a forward 12-month Price/Sales basis.
Image Source: Zacks Investment Research
What Should an Investor Do?
Despite benefiting from new government mission awards and growing defense opportunities, Rocket Lab continues to face risks related to customer concentration, government spending, intense competition and execution of complex launch missions. The stock has outperformed the industry in recent months and continues to trade at a significant premium to peers. At the same time, weakening earnings estimates and a negative ROIC indicate that Rocket Lab's investments have not yet translated into consistent profitability. Given these factors, investors may consider avoiding the stock at current levels.
RKLB currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.