Rocket Lab stock jumps after narrower loss and record quarterly revenue

Rocket Lab USA Inc. (RKLB) shares jumped nearly 10% after reporting a narrower-than-expected Q3 loss of $0.03 per share and record revenue of $155 million, surpassing analyst estimates. The company provided an upbeat Q4 revenue outlook of $170-$180 million, though it anticipates a wider adjusted EBITDA loss. This strong performance, coupled with a growing 49-launch backlog, strategic expansion into the defense sector via the Geost acquisition, and a new annual launch record, prompted several analysts to raise their price targets, reinforcing bullish sentiment despite elevated valuations.

Analysis

Rocket Lab USA Inc. (RKLB) reported a Q3 loss of $0.03 per share on record revenue of $155 million, significantly beating analyst estimates of a $0.10 loss on $151.8 million revenue. This performance marks a substantial improvement from the $0.10 loss on $104.8 million revenue a year prior and represents the highest quarterly revenue on record. The company also provided an upbeat Q4 revenue guidance of $170-$180 million, exceeding the $172 million consensus. However, Q4 adjusted EBITDA loss is projected to widen to $23-$29 million, surpassing the $13 million analyst forecast.

Despite the anticipated wider Q4 EBITDA loss, investors reacted positively to accelerating revenue growth and an expanding contract pipeline, evidenced by the stock's nearly 9.7% jump. CEO Peter Beck highlighted 14 launches in 2025, matching 2024's total, and 17 new contracts in Q3, increasing the total launch backlog to 49. This growth is further supported by strategic acquisitions like Geost, which expands Rocket Lab's presence in the defense space sector.

Following the strong results, several Wall Street firms, including Cantor Fitzgerald, Roth Capital, and Stifel, raised their price targets while maintaining Buy ratings, citing record results and the reaffirmed goal of over 20 Electron launches in 2025. While the company's shares have more than doubled this year, elevated valuations remain a concern, with the stock trading at roughly 170 times estimated 2027 EBITDA of $172 million, which itself was revised down from $225 million. Analysts, however, remain largely bullish due to the expanding backlog and strong market positioning in rapidly growing space and defense markets.

Key Decisions for Investors

• Monitor Rocket Lab's progress towards profitability, specifically the Q4 adjusted EBITDA loss guidance and its trajectory into 2025, to assess the long-term financial health.
• Evaluate the sustainability of the expanding launch backlog and the strategic benefits of defense sector acquisitions like Geost, considering their long-term revenue and margin contributions.
• Assess the elevated valuation multiples against the company's execution on its growth strategy and path to positive EBITDA, especially given the downward revision in 2027 EBITDA estimates.