Sticking With This Rocket Lab Price Target After Rocket Test Failure

Earlier this week, core "Stocks Under $10" name and Sarge-folio holding Rocket Lab (RKLB)  apexed at $99.58, which was up 165% from the stock's November low. Over the past two regular sessions, RKLB has given back 11.8% to close on Wednesday at $87.82 and that was after bottoming for the day at $82.71.

To be fair, there was some negative news. Later in the day, the firm announced that qualification testing for the Stage 1 tank for the Neutron rocket, "resulted in a rupture during a hydrostatic pressure trial." 

The firm's press release added, "Testing failures are not uncommon during qualification testing. We intentionally test structures to their limits to validate structural integrity and safety margins to ensure the robust requirements for a successful launch can be comfortably met."

Rocket Lab stated, "Neutron's development campaign continues while the team assesses today's test outcome. The Company intends to provide an update on the Neutron schedule during its 2025 Q4 earnings call in (late) February."

On That Note...

Rocket Lab successfully completed the firm's first launch of 2026 and its 80th launch of the Electron rocket overall. 

The mission lifted off from the firm's complex in Mahia, New Zealand, deploying two satellites into a 1,050 circular earth orbit for first-time launch customer, Open Cosmos. This is a higher-altitude deployment and showcases Electron's payload trajectory range, enhancing this model's reputation for versatility and dependability.

Wall Street

On Thursday morning, analyst Gautam Khanna of TD Cowen, who is rated at five stars (out of five) at TipRanks, reiterated his "buy" rating on RKLB while increasing his target price from $60 to $100. Khanna wrote that there was apparently no significant damage to the facilities or test structures from the tank rupture and that the next Stage 1 tank is already under production.

Earlier this week, analyst Ronald Epstein of Bank of America (five stars at TipRanks), reiterated his "buy" rating on RKLB while increasing his target price from $60 all the way to $120. Epstein sees Neutron's eventual launch bolstering demand for the firm's services. Epstein also sees Rocket Lab's ability to win national security space contract awards improving to the point that the firm competes with prime defense contractors.

Late last week, analyst Kristine Liwag of Morgan Stanley (five stars at TipRanks), upgraded RKLB from "Equal Weight" to "Overweight" while taking her target price from $67 up to $105. Liwag sees the favorable trends that positively impacted the entire space industry in 2025 carrying into 2026.

Buy the Dip?

Readers will recall that I have covered Rocket Lab quite closely this month. On January 7, I increased my target price to $103 and on January 15, I increased that target to $110. Both were the highs on Wall Street at the time. ​

I gave readers this chart on the January 15 showing the breakout from a cup-with-handle pattern ​and using both an Andrews' pitchfork model to illustrate trend and a Fibonacci extension model to decipher target. The lower trendline of the pitchfork model was tested on Wednesday and did hold.

While I am not panicking, I do want to point out a technical threat to the share price that is forcing me to slow my instinct to add on dips, especially after such an aggressive run for the roses over the past couple of months. 

Take a look at this:

Just be fully aware that the stock might be developing a head-and-shoulders pattern of bearish reversal. Right now, the head portion of the pattern is still not completed, so this may be a stretch, but my readers and followers who are in this investment ​need to be fully cognizant of this threat. My target price remains $110. The stock is still up 268% over 12 months. Just pay attention to what the swing crowd does in response if the 21-day EMA comes under fire.

At the time of publication, Guilfoyle was long RKLB.