Wall Street was largely effusive about Rocket Lab’s execution and growth, as analysts reacted to the space company’s second-quarter results from Tuesday. Rocket Lab reported Q2 numbers that nearly matched Wall Street’s expectations on revenue and net loss, while its order backlog rose and it added contracts for another 10 launches. “Yet another strong quarter of results,” Bank of America analyst Ron Epstein wrote in a note to clients. Rocket Lab stock slid about 4% in early trading on Wednesday, after rising as much as 10% in premarket, from its previous close at $6.66 a share. Here’s what analysts had to say about Rocket Lab’s performance. Bank of America — Buy, $14 price target The firm sees Rocket Lab stock more than doubling, with Epstein calling out its “stronger than expected” gross margin rate in the second quarter and “robust” demand for the company’s Electron rocket. Deutsche — Buy, $10 price target Deutsche analyst Edison Yu highlighted Rocket Lab’s “strong headline results,” but noted the “choppiness” in near-term growth – with the company’s space systems business revenue coming in lighter than expected but still “an increasingly stable high-margin business that faces limited competition.” Overall, Deutsche sees Rocket Lab as “becoming a major player” in the space economy as the U.S. rocket market has “scarce” options, with the company expecting to conduct 20 launches in 2024, up from 15 expected this year. Morgan Stanley — Overweight, $10 price target The firm’s Kristine Liwag believes Rocket Lab stock “still has room to run” despite climbing about 70% so far this year. “The company is benefitting from industry capacity constraints while proving out capability in newer verticals” such as its spacecraft and hypersonic products, Liwag wrote. Stifel — Buy, $11 price target Stifel analyst Erik Rasmussen wrote that Rocket Lab’s “solid” Q2 report showed the strength of its revenue growth, and the firm’s “thesis remains intact” despite the “temporary issue” of space system revenue coming in lighter than expected. “We now see RKLB focused on driving further margin improvement, which will come from achieving a higher launch cadence,” Rasmussen wrote. Roth Capital – Buy, $10 price target Analyst Suji Desilva also emphasized Rocket Lab’s “steady launch execution” and expansion toward becoming an “end-to-end vendor” in the space market. Citi – Neutral, $7.40 price target Citi’s Jason Gursky was the sole non-bullish analyst reacting to the company’s results, but his firm did reset its price target up from $4.55. Gursky wrote that Rocket Lab’s Q3 revenue guidance “was roughly 20% below our estimate as the company grapples with the timing of new program ramps,” which is “a key watch item in the quarters ahead as solid execution on this work will be critical to securing following-on from customers.” – CNBC’s Michael Bloom contributed to this report.
