Space Stocks Retreat as SpaceX IPO Looms

Space sector stocks faced sharp declines Monday, with Rocket Lab, Redwire, and Firefly Aerospace leading the selloff. The pullback comes as investors reassess valuations ahead of SpaceX's anticipated June IPO—a potential inflection point for the high-flying sector.

Redwire plunged nearly 15% after a Jefferies downgrade to Hold, despite the analyst raising her price target to $24. The stock had rallied 163% in the past month. Rocket Lab dropped over 13%, extending its retreat from recent highs. Technical indicators flash warning signs: Rocket Lab's RSI hit 80 while its Stochastic Oscillator breached 90—both classic overbought signals.

The sector's breathless rally now confronts reality checks. AST SpaceMobile trades at 260x estimated 2026 sales, while Rocket Lab has soared 4,000% from pandemic lows. Market participants increasingly view the SpaceX debut as a 'sell the news' catalyst for stretched valuations across space equities.