Rocket Lab Stock Warning 2026: Is the 250% Rally Over?

• Is Rocket Lab’s Stock Overheated?
• Why Are Big Investors Still Buying?
• 2026: The Ultimate Litmus Test
• FAQ: Rocket Lab Stock in 2026

Rocket Lab's stock has soared 250% in the past year, but analysts now warn it’s dangerously overvalued. With a delayed Neutron rocket launch and mixed signals from institutional investors, 2026 could be a make-or-break year. Here’s what you need to know.

Is Rocket Lab’s Stock Overheated?

Rocket Lab USA’s stock has been on a tear, skyrocketing over 250% in the last 12 months. But now, analysts are sounding the alarm: the stock’s valuation appears completely detached from its fundamentals. At $86.58 per share, the company’s market cap sits at a staggering $46.25 billion—48 times its expected revenue. Using EV/EBITDA metrics, some analysts project a 20-38% downside. The Wall Street consensus isn’t optimistic either, with an average price target of $71.38, well below current levels. Adding fuel to the fire, the Neutron rocket’s debut has been pushed back to 2026, costing an extra $15 million per quarter. For a company already grappling with cash Flow issues, this delay is a serious red flag.

Why Are Big Investors Still Buying?

Despite the warnings, institutional investors aren’t backing down. In Q3 2025, Sumitomo Mitsui DS Asset Management scooped up 48,000 shares worth $2.29 million. Institutions now hold over 71% of Rocket Lab’s outstanding shares. Their confidence stems from a $816 million contract with the Space Development Agency and rumors of a potential $1 billion deal with the U.S. Space Force. The company’s order backlog has surpassed $2 billion, and operationally, Rocket Lab is firing on all cylinders—2025 saw a record 21 successful Electron missions. The Neutron rocket, though delayed, promises to disrupt the market with its 13,000 kg payload capacity (even if it still trails SpaceX’s Falcon 9).

2026: The Ultimate Litmus Test

This year is critical for Rocket Lab. The market expects the company to finally turn a positive EBITDA and operational cash flow—but only if the Neutron rocket launches successfully. Q4 2025 earnings, due March 3, 2026, will be a key indicator. Investors will scrutinize whether Rocket Lab can rein in costs from the Neutron delays and whether defense-sector revenues justify its sky-high valuation. One thing’s clear: the stock’s future hinges on execution. As the BTCC team notes, “This is a high-risk, high-reward play—investors should tread carefully.”

FAQ: Rocket Lab Stock in 2026

Is Rocket Lab stock a buy or sell?

Analysts are split. While institutional buying suggests confidence, the stock’s valuation metrics and Neutron delays raise concerns. The average price target ($71.38) implies downside from current levels.

What’s driving institutional interest in Rocket Lab?

Big investors are betting on the company’s $2B+ order backlog and potential defense contracts. The Neutron rocket’s payload capacity also positions Rocket Lab as a SpaceX competitor.

How significant is the Neutron delay?

Very. The 2026 postponement adds $15M/quarter in costs and delays profitability timelines. Successful execution is now a must for the stock to hold its gains.