Rocket Lab (RKLB, Financial) has been chosen by defense contractor Kratos to conduct a full-scale hypersonic test flight for the U.S. Department of Defense. This mission is part of the Multi-Service Advanced Capability Hypersonic Test Bed 2.0 (MACH-TB 2.0) program. The launch is slated to occur no earlier than the first quarter of 2026 from Rocket Lab’s Launch Complex 2 situated on Wallops Island, Virginia.
Kratos has awarded Rocket Lab the contract under the MACH-TB 2.0 initiative, which is valued at $1.45 billion. This program aims to significantly increase and expedite the testing of hypersonic technologies. Rocket Lab became part of the MACH-TB 2.0 subcontractor team in January, after previously achieving multiple successful test launches during the initial phase of the MACH-TB program, including three missions conducted for the Department of Defense within 2023.
The missions were launched from the same Virginia location, emphasizing Rocket Lab's reliability and efficiency in delivering frequent and capable launches. Rocket Lab’s proprietary HASTE rocket, a modified version of their Electron rocket, will be used for this mission. It features advanced technology similar to Electron, such as carbon fiber composite structures and 3D printed engines, but is equipped with a customized Kick Stage that is optimized for hypersonic tests and has a larger payload capacity of up to 700 kg.
HASTE is engineered to operate at speeds exceeding 7.5 km per second, allowing for comprehensive testing of air-breathing, glide, and ballistic payloads, as well as atmospheric re-entry technologies. Combined, Rocket Lab’s HASTE and Electron launch vehicles have successfully deployed over 200 payloads to date, underlining their expertise and capacity in space launch services.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Rocket Lab USA Inc (RKLB, Financial) is $24.32 with a high estimate of $33.00 and a low estimate of $14.35. The average target implies an upside of 19.96% from the current price of $20.28. More detailed estimate data can be found on the Rocket Lab USA Inc (RKLB) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Rocket Lab USA Inc's (RKLB, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Rocket Lab USA Inc (RKLB, Financial) in one year is $15.52, suggesting a downside of 23.45% from the current price of $20.275. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Rocket Lab USA Inc (RKLB) Summary page.
Key Business Developments
Release Date: February 27, 2025
- Annual Revenue: $436 million, a 78% increase year-on-year.
- Q4 2024 Revenue: $132 million, a 121% increase year-on-year.
- Launch Services Revenue: $42.4 million for Q4; $125.4 million for the full year, a 74% increase year-on-year.
- Space Systems Revenue: $90 million for Q4; $310.8 million for the full year, an 80% increase year-on-year.
- GAAP Gross Margin: 27.8% for Q4; 26.6% for the full year.
- Non-GAAP Gross Margin: 34% for Q4; 32% for the full year.
- Total Backlog: $1.07 billion, with $386 million in launch backlog and $681 million in Space Systems backlog.
- Q4 Operating Expenses: $88.4 million GAAP; $74.5 million non-GAAP.
- Cash and Equivalents: $484 million at the end of Q4 2024.
- Adjusted Loss: $23.2 million for Q4 2024.
- Q1 2025 Revenue Guidance: $117 to $123 million.
- Q1 2025 GAAP Gross Margin Guidance: 25% to 27%.
- Q1 2025 Non-GAAP Gross Margin Guidance: 30% to 32%.
- Q1 2025 Adjusted EBITDA Loss Guidance: $33 million to $35 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rocket Lab USA Inc (RKLB, Financial) achieved its highest annual revenue to date of $436 million in 2024, marking a 78% increase from the previous year.
- The company successfully executed a record number of 16 launches in 2024, maintaining a 100% mission success rate.
- Rocket Lab USA Inc (RKLB) signed over $450 million in new contracts in 2024, strengthening its backlog to over a billion dollars.
- The company made significant progress in its Space Systems segment, including the completion of twin spacecraft for NASA's escapade mission to Mars.
- Rocket Lab USA Inc (RKLB) is advancing its Neutron rocket program, with plans to address the medium launch market and support the deployment of an estimated 10,000 constellation spacecraft over the next decade.
Negative Points
- The timeline for the Neutron rocket's first launch has been pushed to the second half of 2025, indicating potential delays.
- Rocket Lab USA Inc (RKLB) faces challenges with supplier dependencies, which have caused some delays in the Neutron program.
- The company anticipates increased cash consumption in Q1 2025 due to Neutron-related investments and lower milestone payments.
- There is some uncertainty in the industry regarding defense programs under the new administration, which could impact future contracts.
- Gross margins in the launch business can be volatile quarter to quarter, influenced by customer mix and mission type.
