Rocket Lab stock price has gone parabolic, rising in the last five consecutive weeks, and reaching its highest level since November 2021. The RKLB share price has jumped by 320% from its lowest level this year, bringing its market cap to over $6.7 billion.
Rocket Lab stock price surges ahead of earnings
Rocket Lab share price has done well this year as the company continued to gain market share in the space industry amid Boeing’s woes. Most recently, the company won a large NASA study contract, worth millions.
Rocket Lab is a top industrial company in the space industry, where it offers end-to-end space solutions to companies and government agencies. It has become a popular name because of its innovations, including 3D printing and automation. The company has space launches in New Zealand and in the US.
Rocket Lab has two products in its ecosystem: Electron and Neutron. Electron is a product that is designed to launch small satellites with a maximum weight of 300 kilograms, while Neutron is made for medium launches, where demand is growing.
Data shows that 10,000 satellite launches are needed by 2030 and that the total addressable market has jumped to $10 billion.
The next key catalyst for the RKLB stock price is the earnings, which will come out on Tuesday after the market closes.
The most recent results showed that its revenue jumped to a record high of $106 million as it launched satellites for companies like Kineis, Synpspective, and the Korean Advanced Institute of Science and Technology.
Most notably, the company launched its 50th Electron mission at the faster pace than all commercial rockets in the industry. Rocket Lab also announced 17 launch contracts, which pushed its order backlog to over $1 billion.
Analysts expect that Rocket Lab’s revenue will come in at $102.28 million, with the low and higher estimates being $102 million and $99.80 million. In its last earnings, RKLB provided a revenue guidance of between $100 million and $105 million.
Most of this revenue will come from the space systems, which will make between $79 million and $84 million. Its gross margins are expected to move between 25% and 27%.
Is the RKLB stock overvalued?
The key concern for the RKLB stock price is whether it has become highly overvalued, which explains why it has a short interest of 12.5%. Besides, this is a highly-loss-making company that has a market cap of over $6 billion.
Rocket Lab proponents point to its strong growth trajectory. Data shows that its revenue will jump to $423 million this year, up by over 73% from the $244 million it made last year.
Its revenue will then move to $596 million, up by 40% from what it will make this year. If this trend continues, analysts expect that Rocket Lab’s revenue will get to over $1 billion in the next three or four years, helping to justify the current valuation metric.
The challenge, however, is that Rocket Lab will likely not turn a profit in the near term. It has gross margins of about 25% and a net income margin of minus 54%. Its EBITDA margin has moved to minus 43.26%.
As a result, it may need to raise more cash in the coming months. The company ended the last quarter with over $340 million in cash and equivalents. It also has over $155 million in marketable securities and $104 million in inventories.
Read more: Avoid Virgin Galactic stock: buy Rocket Lab instead
Rocket Lab stock price analysis
RKLB chart by TradingView
The weekly chart shows that the RKLB stock price formed a major bottom at $3.66, where it failed to move below since 2023. It has also moved above the crucial resistance level at $8.05, its highest point on June 23.
Rocket Lab share price has moved above the 25-week and 15-week moving averages. It has also jumped above the 61.8% Fibonacci Retracement level.
The MACD and the Relative Strength Index (RSI) have continued rising in the past few weeks, moving to the overbought level.
Therefore, more gains could push the Rocket Lab share price up by 44.4% to an all-time high of $21.32. The alternative for this view is where the stock drops to the crucial support at $8, which is also 8% below the current level.
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