New Rocket Lab Price Target After Multi-Billion Dollar Contract News
The aerospace firm has announced participation in a pair of major government programs from the U.S. and U.K.
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We touched on Palantir Technologies PLTR this week and last when we upped our target price. Palantir then landed a potentially huge (size undisclosed) contract award from our NATO allies.
Now, on Tuesday morning, another of our former core "Stocks Under $10" portfolio holdings is in the news. We last touched on Rocket Lab USA RKLB in March when the firm had been selected to compete for inclusion for the potential $5.6 billion National Security Space Launch program.
The stock soared that day but had sold off from the peaks realized in late 2024/early 2025 and sold off again after that news, not being as exclusive to Rocket Lab as first believed in the way the original release had been worded, wore off. Just two weeks ago, Citigroup C warned that Rocket Lab faced some risks to revenue due to possible changes in the U.S. Space Force's approach to the Space Development Agency's Transport Layer program.
Citi's fear was that the Space Force might shift from the building of satellite constellations to simply acquiring those services from the likes of a competitor such as SpaceX. It would basically be a matter of outsourcing over construction.
Rocket Lab USA News
On Monday, Rocket Lab USA released news that the firm had been selected to provide hypersonic test launch capability with its HASTE launch vehicle and other services through its participation in two "multi-billion" dollar government programs for the United State and the United Kingdom.
Rocket Lab has been selected by the Air Force to participate within its enterprise-wide agile acquisition contract, a $46 billion delivery-indefinite quantity contract designed for the rapid acquisition of innovative technologies, engineering services and technical solutions that furthers the Air Force's capabilities. The program has a contracting period scheduled to run until the year 2031 and is expected to be broad in scope.
Rocket Lab was also selected by the U.K.'s Ministry of Defense for its Hypersonic Technologies & Capability Development Framework, which is a $1.3 billion program aimed at rapidly developing advanced hypersonic capabilities for the Royal Air Force.
Across both programs, the firm can now be expected to bid for contracts and task orders as well as other services having to do with the development of hypersonic weapons. On the matter, CEO Sir Peter Beck commented:
“The ability to contribute toward the collective security of the United States and the United Kingdom across both of these important programs is a proud moment for the HASTE team, and a demonstration of Rocket Lab’s commitment to lead from the front when it comes to innovative and unique solutions for hypersonic technology development.”
Rocket Lab USA Could Have a Mixed Quarter
Rocket Lab USA is expected to release the firm's first quarter financial results on or about May 8.
Wall Street is looking for an adjusted EPS of -$0.09 on revenue of a rough $121.5 million. This would compare to -$0.06 for the year-ago comp, but on revenue growth of about 31%. The firm had guided revenue towards a range of $117 million to $123 million, so that sales print would be above the midpoint if that span. For investors, I think adjusted gross margin has to remain at 30% or better in order to see this coming release as a positive.
The Rocket Lab Stock Chart
Readers were already familiar with the closing pennant that led to the February sell-off for this stock. RKLB has since developed a double-bottom pattern of bullish reversal with a pivot of $20.50 that used the 200-day SMA for support. The stock is testing the 50-day SMA on Tuesday, which becomes our pivot given its proximity to the pivot created by the pattern. This is where portfolio managers will make decisions on increasing or decreasing long-side exposure.
Relative strength is clearly gaining upside momentum. The daily MACD is looking better as well with the histogram of the nine-day EMA already in positive territory and the 12-day EMA now above the 26-day EMA. We will need those two lines to cross above zero as well, should this rally have legs.
Rocket Lab USA (RKLB)
Target Price: $28 (down from $30)
Pivot Point: $21.20 (50-day SMA)
Add: Down to the 200-day SMA ($15.80)
Panic: Loss of 200-day SMA
At the time of publication, Guilfoyle was long RKLB and PLTR equity.
