While the space industry has been one of the fastest-growing areas of investment over the last few years, one of the biggest gamechangers in the industry is the rising number of firms sending satellites up into space. As such, investing in space stocks is becoming a high-risk, high-reward strategy for investors.
Most commercial space revenue comes from the sale of satellite data - and with this in mind, let's take a look at one satellite space company that has bullish forecasts from Wall Street analysts.
Rocket Labs Stock Underperforms
Rocket Lab USA, Inc. (RKLB) is a California-based company that provides space systems solutions and launch services. It provides end-to-end mission services, providing trustworthy access to civil, defense, and commercial markets. It also works on spacecraft technology, space solar power, flight software, and advanced composite structures. Founded in 2006, the company operates in Virginia, Colorado, Maryland, New Mexico, Toronto, and New Zealand.
Valued at $1.7 billion by market cap, Rocket Lab stock has dipped 36% YTD and is down 14% in the past month.
The company posted its Q4 results back on Feb. 27, with revenue of $60 million up 16% YoY, but missing estimates of $62.9 million. Rocket Lab's quarterly loss per share widened year-over-year to $0.10, as the company ramped up spending to create its first Neutron rocket.
On a full-year basis, RKLB reported a loss of $182.6 million, or $0.38 per share, while revenue came in at $244.59 million. Rocket Lab anticipates revenue between $92 million and $98 million for Q1 2024.
Rocket Labs Wins Space Force Contracts
Rocket Labs won two contracts last week from the U.S. Space Force. The first contract was worth $14.5 million, as Space Force announced an experiment called “DISKSat” to launched a small satellite lower into the earth’s orbit. Now interestingly, The contract is worth roughly double the usual award for Rocket Labs.
As per the second contract from Space Force, Rocket Labs will be earning $32 million for a tactical response space mission.
In addition to securing new contracts, Rocket Labs is also working to reuse and relaunch a previously launched Electron rocket, something only Elon Musk’s SpaceX has so far been successful in doing.
Should You Buy RKLB Stock?
Analysts are very optimistic about the stock, with a consensus “Strong Buy” rating on RKLB. At present, there are a total of 10 analysts covering the stock, and 9 of those have a “Strong Buy” rating while the remaining analyst has a “Hold” rating on the stock.
While the recent interest rate and geopolitical jitters have sent RKLB stock reeling, Wall Street has high hopes for this small space stock to rocket higher. The mean price target is $7.92, indicating an upside potential of more than 124% from current levels.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
