Rocket Lab: Top Aerospace Stock Up 350%, But Valuation Looks Stretched

Summary:

• Rocket Lab’s stock has surged 133% since September, with a total return of 355% since November 2023, driven by strategic growth and new contracts.
• I bought Rocket Lab shares due to its innovative approach in the launch market and the development of the Neutron rocket, despite initial regret for not investing earlier.
• Rocket Lab’s revenues are growing, especially in the Space Systems segment, with a strong cash position to support Neutron rocket development without discounting future launches.
• Despite a strong future outlook, I recommend incrementally building positions as the current stock price of $22.50 may cool off, with a more compelling investment case at $15.45 or below.

In September, I covered Rocket Lab (NASDAQ:RKLB) and reiterated my buy rating on the stock. Since then, several things have changed, and one of those changes is that the stock has gained 133% since my report, which is impressive. It brings

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RKLB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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