New Rocket Lab Price Target After ESA News Drives All-Time High

Core "Stocks Under $10" name Rocket Lab USA RKLB rallied to an all-time record high on Thursday, closing up 11.7% at $36.14. 

This is another one of old SU$10 Portfolio's great victories as my cost basis is $9.14 after trading in and out of portions on the way up. I honestly don't remember where I got the old portfolio into Rocket Lab, but it was lower than that. If it weren't for our position in Palantir Technologies PLTR (initiated with a $6 handle), which is up 2,330% from initiation, this is the one we'd be talking (bragging) about.

The catalyst for this particular rally was news that was actually released on Wednesday. The firm had been selected to launch a dedicated "Electron" mission for the European Space Agency (ESA) for the very first time. The mission, here, is to deploy a pair of satellites for a future navigation focused constellation for the EU. Rocket Lab will launch two Pathfinder A spacecraft for ESA, provided by Thales Alenia Space and GMV (European satellite contractors) from the firm's Launch Complex 1 by December 2025. Launch Complex 1 is on the east coast of North Island, New Zealand. Launch Complex 2 and Launch Complex 3 are both located in the U.S. state of Virginia.

The CEO

Rocket Lab USA CEO Sir Peter Beck commented: “Launching a European mission on Electron that is integral to the future of Europe’s satellite navigation system is both an honor and a testament to our industry-leading launch service. An important constellation like LEO-PNT (Low Earth Orbit Positioning, Navigation, and Timing) needs a strong foundation to grow from, and with Electron’s track record of precise orbital deployment, we’re excited to help secure the future of LEO-PNT for Europe with our launch of these first two satellites in the constellation.”

In Addition

Rocket Lab also, on Thursday, celebrated the successful launch of the firm's 67th Electron rocket to deploy four satellites for Hawkey 360, which is a provider of geospatial analytics. The firm is expected to release its second quarter financial results at some point during the second week of August.

Right now, Wall Street is looking for a GAAP EPS of -$0.10 adjustable to -$0.07 on revenue of slightly more than $135 million. This should, if accurate, reflect a drop from an adjusted -$0.05 for the year-ago comparison on annual revenue growth of more than 27%.

Out of the five sell-side analysts I have found who cover the name, two have upwardly revised their earnings estimates and two have downwardly revised their earnings estimates since the start of the quarter. That would be a deceleration from 32% growth for Q1, but growth is expected to accelerate to 42% for Q3.

The Chart​

Readers will see that the cup pattern that I drew up for you a​ month ago has extended and added a handle, which is a bullish signal. The stock retested its 21-day EMA with the development of that handle and passed that test with flying colors.

Relative strength is quite robust and has just crossed into what some see as technically overbought territory. The daily MACD, below the chart, is postured extremely bullishly with the histogram of the nine-day EMA well above zero and the 12-day EMA well above the 26-day EMA with both of those lines also well above the zero-bound. That's about as nice as a cool drink of water on a hot summer day. We have new levels for investors.

Rocket Lab USA (RKLB)

Target Price: $42 (up from $39)

Pivot Point: $33 (up from $31)

Add: Down to the 50-day SMA (currently $25)

Panic: Loss of the 200-day SMA (currently $21)

At the time of publication, Guilfoyle was long RKLB and PLTR equity.