We're Sticking With This Rocket Lab Price Target After 'Major Inflection Point'
Can Rocket Lab USA blast off again? Guidance will be key to the stock price as the business is growing.
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One of our former core "Stocks Under $10" names still hasn't been reported this season.
When it comes to our major "SU $10" victories, of course, Palantir Technologies PLTR, with its incredible 2024 and 2025-to-date runs, claims most of the attention. Rightfully so. Palantir reported last Monday, and the stock is up 39% (up more than 1,800% since entering we first placed it in the SU $10 portfolio) since last Monday and is now the nation's largest defense contractor by market cap. Rock and roll.
Then there's SoFi Technologies SOFI, which has been another victory for the old SU $10 portfolio, but only a doubling-of-the-money type victory, not what PLTR has done for us. SOFI reported in late January.
That leaves our other big mover, Rocket lab USA RKLB, that has simply blasted off (up 628% since the August low) since last summer. Rocket Lab has "cooled" since it's amazing run stalled during the holiday season, but the stock has traded sideways to slightly higher since, it has not come in.
The firm is set to report after the closing bell on Thursday, February 27. Wall Street is looking for an adjusted EPS of $-0.07 on revenue of $130.6M million This would stand up well to $-0.08 for the year-ago comparison while reflecting year-over-year revenue growth of roughly 118%.
Guidance will be key this year as the business is growing. There are deals in place, and the demand for affordable space launch services seems to be more than enough for both SpaceX and Rocket Lab USA to thrive. Sure, there's Blue Origin and some others in the "space" and they will get there, but they are not on the operational level of SpaceX nor Rocket Lab.
Did someone say "acquisition" or "merger"? No, nobody has said those things and that is not why I am in this name. My mind does speculate though.
The Latest Rocket Lab News
RKLB surged 11.6% to $30.60 on Monday after the firm had successfully launched five satellites for French Internet of Things (IoT) firm Kineis this past weekend. The mission was executed from Rocket Lab's complex in New Zealand. The stock is giving some of that Monday run back amid a weaker tape on Tuesday morning.
Additionally, BlackSky Technology BKSY and Rocket Lab announced that a launch window had been opened for February 18 (a week from this writing) for BlackSky's first Gen-3 satellite. This mission is nicknamed "Fasten Your Space Belts" and will add very high-resolution imaging capability to BlackSky's high-cadence, low-latency (big) data and AI-enabled analytics offerings.
BlackSky CEO Brian O'Toole commented, "This launch represents a major inflection point for our global defense and intelligence customer base as BlackSky introduces very high-resolution Gen-3 capabilities to our high-frequency, low-latency monitoring constellation. As more Gen-3 satellites complete production, we expect a regular cadence of additional launches over the coming year."
Sir Peter Beck, CEO and founder of Rocket Lab USA, piped in: "Electron is a trusted and reliable constellation builder for companies like BlackSky, allowing them to be in control of how, when, and where to deploy their constellation. BlackSky is one of our earliest and longest standing commercial satellite customers, and it's great to be heading back to the pad with them once again to continue to advance and expand their constellation."
Charts Ahead of Earnings
This basing period of consolidation with a precise pivot of $31.64 is what I showed you a couple of weeks ago. This is what I now see:
The flat base is starting to look like an ascending triangle with a $32 pivot. The pivot is similar, but the key here is that flat bases are neither bullish nor bearish and ascending triangles are bullish.
That could very well mean a continuance of the upward trend after this consolidatory period ends. I could nudge my $39 target price a little higher, but let's see the stock take out the pivot first. The difference is in the renewed conviction, from a technical perspective.
Target Price: $39 (reiteration)
Pivot Point: ($32)
Add: Down to the 50-day SMA ($26.50)
Panic: On new post-November low ($22)
At the time of publication, Guilfoyle was long PLTR, SOFI, RKLB and BKSY.
