Rocket Lab Stock (RKLB) Is Crashing—Here’s What You Need to Know
Rocket Lab's stock (RKLB) just hit turbulence—and investors are scrambling for the exits. What's behind the sudden drop? Let's break it down.
The Bear Case Bites Back
Market sentiment flipped faster than a failed booster landing. Rising interest rates? Check. Profit-taking after last quarter's rally? You bet. Even space stocks aren't immune to gravity.
Short Sellers Circle
Short interest crept up 12% this month—Wall Street's vultures smell blood. Never mind that Electron launch cadence remains steady. When momentum reverses, fundamentals get ignored.
The Silver Lining?
Cash reserves still look solid ($355M last quarter), and Neutron development chugs along. But in today's market, 'long-term potential' gets you about as far as a paper rocket.
Memo to space investors: Maybe don't check your portfolio mid-reentry. Or do—if you enjoy the smell of burning money.
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CEO Peter Beck said that the firm chose to delay the launch so it could focus on making sure the rocket is SAFE and reliable, rather than rushing to meet the original deadline. Although the main hardware for Neutron is already built and being tested, Rocket Lab said it needs more time to finish safety checks and risk reduction before it’s ready to fly. Interestingly, though, five-star BTIG analyst Andre Madrid pointed out that Rocket Lab would have posted positive adjusted EBITDA in Q3 if not for the costs tied to the delay.
In addition, the total development cost for Neutron is expected to reach about $360 million by the end of the year across research, development, and equipment spending. Madrid also mentioned that Rocket Lab’s business is still growing, thanks to more frequent Electron rocket launches and improved profit margins in its space systems division. However, even though Rocket Lab has made progress in other areas, Madrid said the firm is staying cautious and won’t upgrade its rating on the stock until there’s more clarity about Neutron’s success.
Is RKLB Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RKLB stock based on nine Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average RKLB price target of $64.33 per share implies 50.5% upside potential.
