Rocket Lab Corp (NASDAQ:RKLB) experienced a decline in its stock price on Monday as market participants digested contrasting developments within the company’s aerospace ventures. While the Electron rocket recently achieved a successful launch, enabling the deployment of satellites for European contractor Open Cosmos, an issue identified in testing of Rocket Lab’s forthcoming Neutron medium-lift rocket raised concerns.
The successful Electron mission, dubbed "The Cosmos Will See You Now," was executed last week and delivered two payloads to orbit, reinforcing the company's capability in the small satellite launch segment. This operation demonstrated Rocket Lab's ongoing execution strength and the company’s commitment to providing reliable orbital access through its Electron vehicle.
However, investor attention transitioned to the Neutron rocket, which is intended to serve medium-lift missions. On January 21, during a hydrostatic pressure qualification test conducted at the Long Beach, California facility, a Stage 1 tank suffered a rupture. The company clarified that test conditions had subjected the tank to forces exceeding expected operational flight parameters. Rocket Lab characterized such failures as routine within the qualification process, aimed at validating structural safety margins and informing design improvements.
Importantly, the incident did not cause any substantive damage to adjacent infrastructure or testing facilities. A replacement Stage 1 tank is under construction, enabling the continuation of Neutron development activities. Engineers are currently analyzing the captured test data to assess effects on the project timeline and will provide investors with further updates on the Neutron program during the fourth-quarter earnings call scheduled for February 2025.
Market performance of Rocket Lab stock reflects these mixed developments. The share price closed down 9.51% at $80.45 on Monday, deviating from technical averages by trading approximately 3% below its 20-day simple moving average, though it remains substantially higher—by 34.5%—than its 100-day average. Over the last twelve months, the equity has appreciated by 173.09%, positioning it nearer to its 52-week highs than its lows. Technical indicators present a nuanced picture; the Relative Strength Index (RSI) is at 63.64, a neutral zone, while the Moving Average Convergence Divergence (MACD) remains below its signal line, suggesting recent bearish momentum within an overall strong upward trend.
Rocket Lab’s business spans the design, manufacture, and operation of launch vehicles and spacecraft, emphasizing end-to-end mission services for a diverse set of customers in civil, defense, and commercial domains. The company’s portfolio includes the Electron and Neutron rockets alongside the Photon satellite platform. Electron has established its reliability by delivering numerous satellite payloads to orbit, supporting missions ranging from national security to scientific research and communications.
Investor sentiment anticipates Rocket Lab’s forthcoming quarterly earnings on February 26, with consensus analyst forecasts projecting a reduced per-share loss of nine cents compared to a prior year loss of ten cents. Revenue is forecast to increase distinctly year over year, estimated at $178.07 million, up from $132.39 million.
Analyst consensus maintains a positive stance on the stock, carrying a Buy rating with an average price target around $64. Recent analyst actions reflect confidence, with Goldman Sachs maintaining a Neutral rating but raising the price target to $69, Bank of America Securities assigning a Buy rating and increasing its target to $120, and Morgan Stanley upgrading the stock to Overweight with a $105 price target.
Additional analysis from Benzinga Edge indicates strong momentum for Rocket Lab’s shares compared to the broader market, scoring 96.98 in momentum measures. Given Rocket Lab's significant weighting in aerospace and defense exchange-traded funds—such as 5.66% in the SPDR S&P Aerospace & Defense ETF (NYSE:XAR), 4.30% in the ARK Autonomous Technology & Robotics ETF (BATS:ARKQ), and 4.81% in the First Trust Indxx Aerospace & Defense ETF (NYSE:MISL)—movements in these funds could induce correlated adjustments in Rocket Lab's shares through automatic fund rebalancing.
In summary, Rocket Lab is navigating the challenge of sustaining its leadership in launch services while managing developmental risks associated with the Neutron rocket program. The recent structural test anomaly, although a setback, aligns with normal validation procedures to ensure vehicle robustness. Market responses reveal short-term caution as investors await clarity on program timelines and financial results, all while recognizing the company’s demonstrated capability and substantial growth trajectory.