Rocket Lab Corp. (NASDAQ:RKLB) heads into its third-quarter report after the closing bell Monday on a sharp rebound. Shares have climbed more than 25% over the past two sessions, a run kicked off when the stock jumped 15% Friday and continued through early Monday afternoon.
The rally still leaves shares far below the 52-week high of $151 set May 27, and momentum alone will not close the gap. CEO Peter Beck needs to give investors a reason to stay.
- RKLB stock is climbing ahead of earnings. Get all the details here.
Neutron Stays in Focus
The largest overhang remains Neutron, the medium-lift reusable rocket at the center of Rocket Lab’s growth plans. The company pushed the first launch several times, most recently into October 2027. A firmer launch target or concrete testing milestones would go a long way tonight.
Margins and the Iridium Effect
Rocket Lab’s own forecast points to thinner profitability. In August, management guided to third-quarter revenue of $250 million to $265 million, GAAP gross margins of 29% to 31% and an adjusted EBITDA loss of $17 million to $23 million. One quarter earlier, GAAP gross margin guidance stood at 33% to 35%.
The share count has also grown. First-quarter guidance assumed 605 million basic weighted average shares, compared with 641 million for the third quarter.
Much of the increase traces back to Rocket Lab’s roughly $8 billion cash-and-stock deal for Iridium Communications Inc. (NASDAQ:IRDM). The company raised about $1.94 billion by issuing 29.3 million shares to fund the purchase, which remains on track for a mid-2027 close.
Analysts will likely press management on balancing Neutron spending with the Iridium cash payment.
Defense Work Anchors the Business
National security contracts have become a pillar of the company. Rocket Lab holds a Space Development Agency missile-tracking satellite contract worth about $816 million, lifting its total awards from the agency above $1.3 billion.
In July, the Space Force’s Space Systems Command awarded it a $266 million firm-fixed-price contract for 12 suborbital launches.
Last week’s midterms added uncertainty. Democrats won control of both the House and Senate, and Congress controls defense appropriations. Beck’s read on contract demand will draw close attention on the earnings call.
Still Tied to SpaceX
Rocket Lab’s swings have closely tracked Space Exploration Technologies Corp. (NASDAQ:SPCX), and the irony stings.
Cantor Fitzgerald has called Rocket Lab the premier alternative to SpaceX, yet the stock moves in lockstep with its larger rival. Until Neutron flies, Rocket Lab cannot compete for many larger missions.
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What Could Keep the Rally Going
A firm Neutron target would top Rocket Lab investors’ wish lists. Guidance showing margins have bottomed, confidence in the defense pipeline and a clean Iridium update would help too.
Without them, the two-day rally could fade as quickly as it arrived.
RKLB Price Action: Rocket Lab shares were up 9.78% at $58.26 at the time of publication Monday, according to Benzinga Pro data.
Photo: USA TODAY Network via Reuters Connect
