A $266 Million Reason to Buy Rocket Lab Stock Here

Rocket Lab Corporation (RKLB) has come a long way since its early days. Founded by Peter Beck in 2006, the company built its reputation launching small rockets from New Zealand and has since expanded into the United States defense and government market through high-value contracts and space systems work.

On Wednesday, July 22, Rocket Lab’s shares edged higher in intraday trading, putting the stock on track for a second straight day of gains. The move followed the company's announcement that it had secured a $266 million firm-fixed-price contract from the U.S. Air Force to conduct 12 suborbital launches using its Electron rocket, with options for six additional missions.

Managed by the U.S. Space Systems Command, the contract runs through December 2028 and will support launches from Alaska's Pacific Spaceport Complex. It also builds on a $190 million award the company received earlier this year and centers on HASTE (Hypersonic Accelerator Suborbital Test Electron), the suborbital version of Rocket Lab's proven Electron rocket.

The move provides a timely boost for the stock, which has been under significant pressure in recent weeks. The contract is also expected to strengthen Rocket Lab's expanding portfolio of government launch programs as the company deepens its presence in national security and defense missions.

With investors placing greater emphasis on Rocket Lab's prospects, let us see whether the award strengthens the case for its stock. 

About Rocket Lab Stock 

Headquartered in Long Beach, California, Rocket Lab is an integrated space technology company that designs launch vehicles, builds spacecraft, develops satellite components, and creates mission software for commercial customers and government agencies worldwide.

Ballooning into a company worth $40.4 billion, Rocket Lab provides orbital launch, spacecraft manufacturing, mission operations, and on-orbit management services. Its Electron rocket supports small-satellite missions, while the Neutron rocket is for larger, more complex space missions.

When we look at the stock’s long-term trajectory, it has gained 36.9% over the last 52 weeks, driven by strong growth momentum and positive investor sentiment. However, it has taken a big beat in recent times, as rising costs and cautious market conditions weighed on confidence.

It is down 24.3% over the last six months and 29.3% over the last month, a far cry from the 52-week high of $151 it reached on Wednesday, May 27. 

From a valuation standpoint, Rocket Lab certainly does not come cheap. RKLB stock is trading at 45.40 times sales. The multiple sits miles above industry averages, leaving no doubt that investors are pricing in a hefty premium.

A Closer Look at Rocket Lab’s Q1 Earnings

Rocket Lab released its Q1 FY2026 financial results on May 7, triggering a sharp rally in its stock. Shares surged 34.2% in the following trading session and climbed another 11.3% in the session after as investors responded positively to what management called the strongest first quarter in the company's history.

The company generated total revenue of $200.3 million, slightly exceeding the upper end of its guidance range and marking a 63.5% year-over-year (YOY) increase. Space Systems remained the largest contributor, generating $136.7 million in revenue, up 57.2% YOY. 

Also, Launch Services posted an impressive quarter, with revenue rising 78.9% YOY to $63.7 million. Profitability improved alongside revenue, with non-GAAP gross margin reaching 43%, comfortably ahead of management's previous guidance of 39% to 41%.

Additionally, the company's bottom line moved in the right direction. Net loss narrowed 25.7% YOY to $45 million, while loss per share improved 41.7% YOY to $0.07. Adjusted EBITDA came in at a loss of $11.8 million, significantly better than the company's guided range of $21 million to $27 million.

Overall, Rocket Lab strengthened its financial position during the quarter. It ended the period with approximately $2.2 billion in backlog and now has access to more than $2 billion in liquidity, providing ample financial flexibility to support both organic expansion and merger and acquisition (M&A) opportunities.

Looking forward to Q2 FY2026, management has guided for revenue between $225 million and $240 million. The company expects non-GAAP gross margin of 38% to 40% for the quarter.

Meanwhile, Wall Street anticipates the company to continue narrowing its losses. Analysts project Q2 FY2026 loss per share to improve 46.2% YOY to $0.07. For the full year, FY2026 loss per share is expected to narrow 31.6% from the previous year to $0.26, followed by a further 15.4% improvement to $0.22 in FY2027.

What Do Analysts Expect for Rocket Lab Stock?

Following the recent contract win, Stifel analyst Erik Rasmussen described the award as "strong validation of HASTE's operational performance," highlighting its growing strategic importance as the U.S. ramps up investment in hypersonic weapons development. Stifel rated Rocket Lab’s shares a "Buy" and has set a price target of $132.

The broader Wall Street view is equally optimistic, assigning the stock an overall rating of “Strong Buy.” Of the 17 analysts covering Rocket Lab, 12 recommend a "Strong Buy," one has a "Moderate Buy" rating, and four advise investors to "Hold." 

Analysts' price targets further reflect that confidence. The average target price stands at $114.31, implying an upside of 66.3% from current levels. At the high end, the Street-High target of $150 suggests a potential gain of 118.2%.