Rocket Lab's market value has been cut in half as a sector-wide de-risking triggered by the SpaceX IPO sweeps through space stocks.
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Rocket Lab stock crashes 55% as space sector selloff deepens
Rocket Lab USA Inc. shares plunged 12% on July 16 to $67, extending a 55% decline from the year's peak and wiping out $46 billion in market value.
Piper Sandler initiated coverage of Rocket Lab with a neutral rating and $83 price target, applying a 39x multiple to projected fiscal 2027 enterprise value-to-revenue, the firm said in a July 16 note. Morgan Stanley maintained its overweight rating with a $105 target, while Bank of America raised its target to $110.
The stock now trades below both its 50-day moving average of $108.95 and its 200-day moving average of $87.31. The Relative Strength Index has fallen below the neutral 50 level. The selloff mirrors a broader space sector decline: SpaceX shares dropped to near their $135 IPO price from a $225.64 peak, the Procure Space ETF fell to $43 from $68, and Planet Labs slid to $22 from $51.
The $46 billion value destruction leaves Rocket Lab with a market capitalization of about $40 billion, or roughly 55 times trailing sales. The company's next catalyst is its quarterly earnings report, where investors will look for evidence that Neutron launch momentum and the Iridium acquisition can justify the premium valuation.
The company's first-quarter revenue reached $200.35 million, up 63.4% from a year earlier and exceeding the $189.65 million consensus. Its backlog grew 20% to $2.2 billion, supported by orders across its Electron, HASTE and Neutron programs. Rocket Lab completed five dedicated Neutron flights during the quarter.
The $8 billion acquisition of Iridium Communications adds recurring communications revenue and L-band spectrum to Rocket Lab's portfolio. The deal positions the company to compete more directly with SpaceX's Starlink by offering vertically integrated satellite design, manufacturing, launch and network services.
Insider selling adds pressure
Chief Executive Officer Peter Beck sold 1.3 million shares at $84.92 on July 7 through a pre-established 10b5-1 trading plan, generating proceeds exceeding $110 million. Over the past three months, company insiders have disposed of 3.85 million shares valued at roughly $362.8 million. Calamos Advisors reduced its Rocket Lab holdings by 90.1% during the first quarter.
Despite the insider sales, institutional investors control 71.78% of outstanding shares. Wall Street's consensus recommendation is a moderate buy, with an average price target of $110.18, implying about 64% upside from current levels. Wells Fargo holds the lowest target at $60, while New Street Research maintains a buy rating with a $150 target.
The stock's decline has pushed it below the 50% Fibonacci retracement level from its all-time high, with the 61.8% retracement near $60 representing the next potential support. A mean-reversion bounce into earnings remains possible, though the trajectory depends on whether the broader space sector rotation stabilizes.
This article is for informational purposes only and does not constitute investment advice.
