Shares of area flight firm Rocket Lab (RKLB -0.10%) soared 40.4% within the first half of 2025, based on knowledge from S&P International Market Intelligence. A quick-growing firm within the thrilling area economic system, Rocket Lab is up near 600% within the final yr and is inching its means nearer to competing with SpaceX, which now has a reported valuation of $400 billion.
There’s a ton of pleasure round Rocket Lab and the area economic system right now. This is why the inventory surged within the first half of 2025.
Picture supply: Getty Photos.
The following SpaceX?
Rocket Lab is aiming to construct the subsequent vertically built-in area flight firm primarily based in america. It started with its small Electron rocket, which has now accomplished 68 missions and has a big backlog from prospects. The launch car is the one different constant business launcher, exterior of SpaceX, carrying payloads for third-party prospects.
On prime of launching, Rocket Lab has constructed and bought capabilities to promote area methods to prospects, which embody issues like satellites, communication methods, and photo voltaic arrays. This has been an enormous boon to the corporate, resulting in the division now accounting for almost all of its total gross sales.
Lastly, Rocket Lab is engaged on a bigger rocket system known as the Neutron, which goes to compete with SpaceX extra straight. Testing of the Neutron will start shortly, with the full-fledged reusable system anticipated to be prepared throughout the subsequent yr or two. If the Neutron is profitable, Rocket Lab may see a step change in development within the coming years.
Income was $122.5 million final quarter, up 32% yr over yr, and is up an astonishing 734% within the final 5 years. Seeing this development, traders are extraordinarily optimistic about Rocket Lab’s future.
Must you purchase Rocket Lab inventory?
Immediately, after Rocket Lab’s surge, the inventory is at a market cap of $18 billion. Income was simply $466 million during the last 12 months.
Gross sales ought to proceed to develop shortly, however that is an excessive valuation. The inventory has a price-to-sales ratio (P/S) of 42, which is unsustainable. Buyers are inserting big ahead expectations on Rocket Lab after seeing the inventory rise 600%, which ought to make any investor seeking to purchase proper now nervous. Even when the corporate finally reaches billions of {dollars} in annual gross sales, the inventory will possible not carry out nicely for shareholders going ahead. Keep away from shopping for Rocket Lab inventory in your portfolio right now.
Brett Schafer has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Rocket Lab. The Motley Idiot has a disclosure coverage.
