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Rocket Lab slides after Neutral rating flags valuation risk
Piper Sandler set an $83 price target, citing Rocket Lab’s premium valuation versus vertically integrated space peers.
Rocket Lab shares have been hit hard over the past two months, with the stock falling from near $151 in May to the mid-$60s, a drawdown of more than 50% that erased the year’s gains, according to MarketBeat Ratings.
The latest pressure point came from Piper Sandler, which initiated coverage on July 15 with a Neutral rating and an $83 price target. The firm said the stock still looked expensive relative to the company’s complex, vertically integrated space profile, and the downgrade sent shares down more than 11% in a single session.
MarketBeat Ratings also highlighted the valuation gap behind the skepticism, noting Rocket Lab trades at about 66 times trailing sales. The outlet said fiscal 2025 trailing revenue was $601.8 million, while the company posted a net loss of $198 million, leaving net margins at negative 27%.
Even with the valuation concerns, the outlet pointed to ongoing operating momentum and new business, including first-quarter revenue up 63% year over year to a record $200.35 million and contracted backlog at a record $2.2 billion. MarketBeat Ratings added that Rocket Lab secured a $266 million U.S. Air Force contract, was named one of seven companies eligible for a Space Force launch program with a $17 billion ceiling, and is pending an $8 billion acquisition of Iridium to expand its recurring services revenue.