Rocket Lab shares are up 57% in a month, seen climbing further

Like the stages of a rocket burn, Rocket Lab’s share price has been accelerating.

The stock rose 13% in Friday trading (Saturday NZT) putting it up 28% for the week and 123% for the year, with most of the gains coming since it delivered its latest quarterly result.

The catalyst for Friday’s bump was a KeyBanc analyst putting a US$11.00 12-month target on the stock.

And it was capped off by founder and CEO Sir Peter Beck posting a clip of its Neutron engine test-firing at Nasa’s Stennis Space Centre in Mississippi with the quip: “A hot fire a day keeps the critics away.” It was a graphic repudiation of recent unfounded gossip that Neutron’s “Archimedes” engine had blown up.

😂A hot fire a day keeps the critics away,

Of course we are rotating engines in and out as we put them through their paces, find limits and make tweaks. SN2 is on the stand now and SN1 and SN3 will be going back out to the site as soon as next week as we play with things.… https://t.co/z5ky0htBc3

— Peter Beck (@Peter_J_Beck) September 29, 2024

More broadly, Rocket Lab’s June-quarter numbers, reported on August 8, were ahead of analysts’ expectations.

The same day, the firm gave an update on its customer pipeline – which now totals more than US$1 billion ($1.569b) in orders for launches, satellite components and space services – with US defence and reconnaissance agencies, which are relatively immune from economic cycles, accounting for more than half that total.

This month’s surge, which took Rocket Lab’s market cap to US$4.85b, means founder and CEO Sir Peter Beck's stake is now worth about US$485m ($767m).

Rocket Lab also delivered the news that it’s on track to meet its revised, mid-2025 launch date for its much larger Neutron rocket – and that it has delivered two spacecraft to Nasa for a Mars mission set to take off by year’s end.

The Kiwi-American firm will charge US$50-55m ($78m-$86m) per Neutron launch, versus around US$7.5m for its Electron today as it steps up to go toe-to-toe with Elon Musk’s SpaceX.

“This is a big deal for Rocket Lab in many ways,” Devon Funds said in a client note on August 19 as the Mars news was confirmed.

“Rocket Lab will be aiming to show Nasa and the world that it can produce much bigger spacecraft that are capable of a journey throughout the solar system.”

Uncle Sam is investing more in the Kiwi-American firm, too, as the US Government helps build a solid alternative to SpaceX.

Blast off. Still / Rocket Lab livestream

Rocket Lab recently received US$23.9m ($41.3m) under what is popularly known as the Chips Act.

The grant will go towards boosting production at the Kiwi-American firm’s New Mexico plant, which makes radiation-hardened semiconductors in the form of solar cells for spacecraft, which Rocket Lab described in a market filing yesterday as “important components for national defence and security satellites”.

Beck with a prototype nose cone for his company's larger new, crew-capable Neutron rocket, due to launch mid-2025. Rocket Lab has long said Neutron will be the catalyst for it to move into profitability. In the June quarter, Rocket Lab's revenue jumped 70% to US$106.2m as Its net loss narrowed to US$85.9m from the year-ago US$91.5m. The firm has US$546.8M in cash and a US$1 billion-plus pipeline of orders.

Additionally, New Mexico’s state government has committed US$25.5m in financial assistance and incentives to help the expansion.

That came on top of US$24.35m from Space Force’s Space Systems Command for its Neutron rocket’s upper stage and US$45m from Virginia toward the Neutron’s manufacturing, mission control and launch facility.

More Kiwi investors piling on board

Yesterday, factional ownership platform Sharesies updated the Herald on its numbers.

“The growth in the number of investors with Rocket Lab holdings is up 3% since the end of July,” a Sharesies spokeswoman said, implying more than 20,600 people on the platform now have a stake in Beck’s firm.

But some are also profit-taking.

“Total buying and selling amounts are up on the prior months. September saw total trading volume up three times on the monthly average of May through July,” the Sharesies spokeswoman said.

“We’ve seen a buy-to-sell ratio below one during September. That is, more money is being sold in Rocket Lab than bought, but more customers are buying than selling – meaning the buying customers are doing smaller trades, by dollar value, than those selling.”

Rocket Lab’s recent run-up also has to be seen in context. Although it’s satisfying for investors to see the stock bust out of the US$5.00 orbit it has hugged since early 2022, it’s still only climbing back to its August 2021 Nasdaq listing price of US$10.00.

Beck owns 10.5% of the firm, after selling down from 11.3% in September last year to capitalise his charitable foundation. The transaction netted him US$20.23m.

This month’s surge, which took Rocket Lab’s market cap to US$4.85b, means his stake is now worth about US$485m ($767m).

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.