Rocket Lab Looks More and More Like a SpaceX Competitor. The Stock Is Up.

Rocket Lab gains after Cantor Fitzgerald reaffirms its Outperform rating, pointing to revenue boosts from a coming acquisition and a larger rocket model. (Dreamstime)

Key Points

• Rocket Lab rises Monday after Cantor Fitzgerald analyst Andres Sheppard reiterates his Outperform rating and $122 price target.
• Sheppard cites long-term revenue boosts from Rocket Lab’s planned acquisition of Iridium Communications, expected to close by mid-2027.
• The coming debut of Rocket Lab’s larger Neutron rocket later this year is expected to increase payload capacity and boost profit margins.

The space business is roaring, and it isn’t just SpaceX getting all the applause.

stock jumped Monday after Cantor Fitzgerald analyst Andres Sheppard issued a bullish note on the company. He cited long-term revenue boosts from Rocket Lab’s acquisition of Iridium Communications , which is expected to be completed by mid-2027. He also highlighted the coming debut of Rocket Lab’s larger Neutron rocket, which he sees as a direct competitor to SpaceX’s Falcon 9.

Sheppard reiterated his Outperform rating on with a $122 price target.

Rocket Lab advanced 7.5% to $69.38 on Monday, but it wasn’t the only space stock to climb. SpaceX stock rose 0.8%, AST SpaceMobile gained 5.6%, and Planet Labs advanced 3.2%, as hopes for a U.S.-Iran deal spurred a broad market rally.

The Iridium acquisition is key for the stock because it marks a strategic shift for Rocket Lab, enabling it to manage its global satellite communications and launch capabilities under one roof, much like SpaceX does.

In addition, Iridium generates more than $850 million in annual revenue. That means Rocket Lab’s total annual revenue could roughly double once the deal closes, Sheppard noted.

But the stock’s “most material catalyst,” according to Sheppard, is Rocket Lab’s new rocket Neutron, which is expected to launch later this year. The company’s current Electron rocket handles light loads of around 300 kilograms, while Neutron will be able to carry about 13,000 kilograms—a more than 40-fold increase in payload capacity, the analyst added.

Neutron will charge between $50 million and $55 million per launch, which could drastically boost revenue per mission, according to Sheppard. Rocket Lab also plans to reuse each Neutron engine up to 20 times, which Sheppard said would lower costs of future launch builds and boost profit margins per mission.

Rocket Lab completed its 96th successful Electron mission this past Saturday, delivering a single satellite for Japanese satellite operator Synspective in its 12th deployment for the company.

“We continue to view this successful track record and launch heritage as an important moat in the industry,” Sheppard wrote.

Write to Mariapaula Gonzalez at mariapaula.gonzalez@barrons.com

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