Should You Invest in This Space Company Before It Goes to Mars?

Rocket Lab (RKLB), valued at $4.78 billion, is a space company that provides launch services and space systems solutions for the space and defense industries. It also offers spacecraft engineering and design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions. Rocket Lab serves commercial, aerospace prime contractors, and government customers. 

The company went public in late 2020, and soon touched an all-time high north of $21. Today, the space-tech stock trades 53% below record levels, despite surging close to 80% in 2024. 

Let’s see if investing in RKLB stock makes sense at its current valuation. 

Rocket Lab Wins a NASA Contract

Last week, Rocket Lab announced it had been selected by NASA to conduct a study to retrieve rock samples from Mars and bring them back to Earth. The mission would fulfill some of the highest priority solar system exploration goals, and may revolutionize our understanding of the red planet, eventually providing answers to whether life existed on the Martian surface. 

Rocket Lab’s study will be delivered for a fraction of the projected program cost, and be completed several years earlier than the expected sample return date in 2040. 

Rocket Lab founder and CEO Sir Peter Beck stated, “Retrieving samples from Mars is one of the most ambitious and scientifically important endeavors humanity has ever embarked upon. We’ve developed an innovative mission concept to make it happen affordably and on an accelerated schedule.” 

In recent years, the company has been implementing a strategy for cost-effective planetary science, positioning it to deliver a low-cost Mars sample return program. Rocket Lab has already demonstrated this strategy by delivering a NASA mission to the moon.

Rocket Lab Completes Testing of Spacecraft for Mars Mission

In July, Rocket Lab announced it had completed integrating and testing two spacecraft destined for Mars orbit. It built the twin spacecraft for the University of California Berkley’s Space Science Laboratory and NASA to enable the Escape and Plasma Acceleration and Dynamics Explorer mission (ESCAPADE). The mission will measure plasma and magnetic fields around Mars, and help NASA learn more about the process driving the planet’s climate evolution. 

Mars missions can take more than a decade from proposal to launch. However, Rocket Lab has delivered the two spacecraft in less than four years, due to a vertically integrated supply chain that streamlines production and proven spacecraft development experience. 

Is RKLB Stock a Good Buy Right Now?

According to consensus estimates, Rocket Lab is forecast to increase sales from $244.6 million in 2023 to $423 million in 2024, with continued top-line growth to $598 million in 2025. While still unprofitable, the company is on track to narrow its losses from $0.37 per share in 2023 to $0.23 per share in 2025. 

Rocket Lab ended Q2 with close to $340 million in cash, providing it the liquidity to support its cash burn for another two years at current levels. 

Out of the 13 analysts tracking RKLB stock, eight recommend “strong buy” and five recommend “hold.” 

The average target price for the stock is $7.66, indicating a downside potential of over 23% from current levels. The Street-high price target of $11 is 10.3% overhead.

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On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.