Rocket Lab’s stock has skyrocketed over the past year, but now momentum could be harder to come by.
“What more do you want?” asked KeyBanc analysts led by Michael Leshock in a late Wednesday note downgrading Rocket Lab shares to sector weight from overweight.
Leshock said his more measured view reflects how Rocket Lab’s recent achievements and potential boons to the space sector seem to be already baked into the stock price.
The stock fell 1.1% on Thursday, after rising 33% over the past three months and 263% over the past 12 months.
Back in December, Rocket Lab won the biggest contract in the company’s history, adding as much as $805 million to its backlog, which stood at about $1.1 billion as of October. Last year, it also completed a record 21 launches of its Electron vehicle, which serves the small satellite market, and opened a new launch pad.
On top of that, Rocket Lab benefits from industrywide momentum, such as excitement around the potential for a $1.5 trillion initial public offering by SpaceX, which experts say would likely drive investment in the space sector. KeyBanc said that space stocks are already being rewarded with higher multiples due to SpaceX’s plans, which were discussed by CEO Elon Musk last month.
The industry is also getting a boost from new NASA Administrator Jared Isaacman, who has said he will encourage competition for NASA vendors and rely more heavily on commercial partners. Isaacman this week met with executives at Rocket Lab and Northrop Grumman, as well asrival firmsSpaceX and Blue Origin.
Additionally, President Donald Trump has called for growing a “vibrant commercial space economy” and plans to ramp up defense spending. Initiatives like the Golden Dome project are expected to benefit Rocket Lab and other space companies, such as Intuitive Machines.
Rocket Lab “is in a high-growth and evolving sector, and this could present opportunities for us to get constructive again,” Leshock said. “We continue to believe that if you hold the keys to space, you are going to be a dominant player.”
The next major catalyst for Rocket Lab is the debut launch of Neutron, a reusable rocket that was unveiled in 2021. Cantor Fitzgerald analyst Andres Sheppard has said Neutron will be the “only viable alternative” to SpaceX’s Falcon 9 once it’s operational.
Rocket Lab had planned to launch the medium-lift rocket by the end of last year but said in November that the rocket will arrive at its launch complex in the first quarter of 2026. CEO Peter Beck told Ars Technica that month that Rocket Lab is taking its time in order to avoid “a huge amount of heartbreak later on.”
Although the lack of a definite launch date disappointed investors, Leshock notes that it “nearly impossible to accurately predict the timing of any rocket program with a high degree of certainty.” For example, the first launch of NASA’s Space Launch System rocket was in late 2022, years behind schedule.
In addition to a Neutron test, Leshock outlined a handful of other catalysts that could make him take a rosier view of Rocket Lab. Those include adding more contracts to its contracted backlog, better-than-expected growth of its space-systems division and additional government spending.