Rocket Lab USA, Inc. is gearing up to announce its second-quarter earnings on August 7, and analysts on Wall Street maintain a cautiously optimistic perspective. This positive outlook is largely linked to significant upcoming events, notably the anticipated launch of the Neutron rocket in the latter half of 2025. However, analysts believe that the potential for significant share price increases may be limited, especially after the stock’s substantial 850% growth over the past year.
Specializing in the development and launch of small satellite rockets, Rocket Lab’s portfolio includes the Electron rocket, which is utilized for small satellite missions, and the Neutron rocket, a reusable medium-lift launcher currently under development.
Earnings expectations for Rocket Lab’s Q2 show an anticipated earnings per share (EPS) of -0.10, slightly lower than the -0.08 EPS reported in the same quarter last year. Revenue projections sit at $135.41 million, indicating a solid year-over-year growth of 27%. The company is also bracing for an adjusted EBITDA loss estimated between $28 million and $30 million for the quarter.
Looking ahead, Rocket Lab’s management aims to achieve positive free cash flow by 2026, driven in part by projected revenues of $900 million and improved profit margins as the Neutron rocket begins to penetrate the medium-lift sector. The company anticipates the possibility of becoming GAAP profitable by 2027, with the potential for its first profitable quarter as soon as late 2026.
Analysts are divided in their views on Rocket Lab. The “Bulls Say, Bears Say” tool from TipRanks reveals that bullish analysts highlight the strategic acquisition of Geost, which enhances Rocket Lab’s capabilities in the national security sector. Furthermore, the company’s selection for the $5.6 billion NSSL Phase 3 Lane 1 program positions the Neutron rocket favorably for gaining government contracts and competing with major U.S. launch providers. Conversely, bearish analysts caution that the U.S. Space Force may lean towards purchasing services from commercial providers, potentially restricting Rocket Lab’s future contract opportunities.
Currently, Rocket Lab stock holds a Moderate Buy consensus rating, with nine Buys and four Holds noted in the past three months. The average target price for Rocket Lab shares is $38.82, indicating a projected downside of 13% from the current trading level.
Despite the challenges, the company’s focus on innovation and strategic positioning in the commercial space market demonstrates its commitment to growth, which may provide a roadmap to future success.