The advanced 8-ton payload class Neutron launch vehicle is designed to transform space access by delivering reliable and cost-effective launch services for satellite mega-constellations, deep space missions and human spaceflight. Video / Rocket Lab
Rocket Lab's shares shot 21 per cent higher to finish the Friday (Saturday NZT) Nasdaq session at US$7.10 for a US$3.3 billion market cap.
The surge followed the Kiwi-American company's second-quarter result, delivered after the bell yesterday, that saw it report a wider loss but make big gains in revenues,with more growth forecast (see numbers below).
Today's gains were a win for New Zealand investors, who were buying into the stock after the result, according to fractional ownership online trading platforms Stake and Sharesies.
"Stake NZ customers were active on the stock last night after the company's reports resulting in Rocket Lab buys increasing 145 per cent with a buy/sell ratio of 5.5 overnight [meaning 5.5 Rocket Lab shares were bought for each share sold]," Stake CEO Matt Leibowitz told the Herald.
"Rocket Lab is a popular stock with Sharesies investors, consistently ranking among the top 25 holdings on the platform, with just over 20,500 shareholders," Sharesies co-CEO Leighton Roberts said.
"In the last week, almost 1100 Sharesies investors have bought Rocket Lab shares, making it one of the week's top buys."
Rocket Lab started the week at US$5.53 ($8.56).
The climb is also good news for the 400 past and present Rocket Lab staff awarded chunks of shares under a performance bonus system - 100 of whom were made millionaires, at least on paper, following Rocket Lab's August 2021 Nasdaq listing.
Today's gains are relative, however. Rocket Lab reverse-listed at US$10.00 per share last August, and surged as high as US$18.69 before getting caught in the tech wreck downdraft.
Predicting where the stock will head is a stretch, given it depends as much on what's brewing in the brain of founder and CEO Peter Beck (and his SpaceX rival Elon Musk) as on market factors. But US investment bank Morgan Stanley recently gave Rocket Lab a US$17.00 12-month price target.
Reuters says the consensus recommendation of nine analysts is "buy". The consensus full-year revenue estimate lifted from US$203m to US$225m after the quarterly result was filed.
Wider loss, but surge in revenue
On Friday NZT, Rocket Lab reported a net loss of US$37.4 million for the three months to June 30, more than double the US$16.7m it lost for the same period last year.
But the Kiwi-American firm also reported revenue that surged to US$55.5m, or five times the amount of its Covid-hit second quarter in 2021, and a third above its first quarter of this year.
It forecast third-quarter revenue would grow to between US$60m and US$63m, and said its adjusted earnings loss would be between US$8m and US$12m (from US$8.5m in the second quarter).
Rocket Lab finished the quarter with US$543m cash from the year-ago US$691m.
"We are encouraged by broad-based momentum that continued across our space systems business which comprised 66 per cent of our revenue in the second quarter," founder and CEO Peter Beck said.
Shares closed up 1.21 per cent to US$5.86 in regular Nasdaq trading, for a market cap of US$4.72band a 14 per cent gain on the week.
The stock slipped 4.7 per cent in after-hours trading after posting its result.
The June quarter saw Rocket Lab launch its first Capstone moon mission for Nasa, and begin construction on its Neutron production complex in the US state of Virginia.
Won't be a long, long time
Beck said his firm was also close to completing a new satellite constellation production facility in Long Beach, California.
The new complex would be used to make satellites for a range of customers, including "17 500kg spacecraft buses for (satellite phone and broadband operator) Globalstar as part of a US$143m subcontract awarded to Rocket Lab in the first quarter of this year.
Beck emphasised earlier this month that Rocket Lab has also expanded its operations in Auckland and Mahia, and is on a recruiting drive to add another 110 staff to its local operation (which currently numbers 600; including its North American staff, Rocket Lab now employs 1400).
Its current quarter has seen Rocket Lab launch back-to-back missions for US military intelligence agency the National Reconnaissance Office, and land a contract to supply components for an upgrade to the US military's missile defence system.
Unfair victim of reverse-listing snobbery
The firm got a shot in the arm earlier this week with a positive write-up in the Wall Street Journal's influential "Heard on the Street" column.
The paper praised Rocket Lab's logistical and financial performance and said it should benefit further from a rise in US defence and aerospace spending, with Russia's Soyuz off the table.
Rocket Lab is now weighing the possibility of building three Neutron rockets in 2024 rather than one.
It said Rocket Lab revenue rose 124 per cent to US$41m in the first quarter (with a pipeline of US$550m of orders) and says its "responsive launch" capability was genuine.
"Shortly after Russia's invasion of Ukraine, satellite-intelligence firm BlackSky asked Rocket Lab for an orbit change just days before it was due to launch, in order to place its satellites more directly over the conflict zone. While changing such missions has traditionally taken months, Rocket Lab pulled it off in 45 days," the Journal says.
So why have Rocket Lab's shares been languishing?
Today the stock closed flat at US$5.44 for a US$2.5b market cap. It listed in August last year at US$10.00.
The Journal said people looked down their noses at firms that went public via a special purpose acquisition corporation (a vehicle for reverse-listing).
It saw the Kiwi-American firm being unfairly lumped in with other aerospace companies that went public through SPACs, most of which were essentially pre-revenue.
"When investors finally come around to discriminating between former SPACs, they may realise that Rocket Lab has long achieved escape velocity."
