Innovative Solutions and Support (NASDAQ:ISSC – Get Free Report) and Rocket Lab (NASDAQ:RKLB – Get Free Report) are both aerospace companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.
Profitability
This table compares Innovative Solutions and Support and Rocket Lab’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Innovative Solutions and Support | 18.82% | 27.52% | 16.28% |
| Rocket Lab | -26.87% | -11.72% | -7.82% |
Valuation & Earnings
This table compares Innovative Solutions and Support and Rocket Lab”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Innovative Solutions and Support | $84.30 million | 3.88 | $15.63 million | $0.94 | 19.44 |
| Rocket Lab | $601.80 million | 64.77 | -$198.21 million | ($0.32) | -210.47 |
Innovative Solutions and Support has higher earnings, but lower revenue than Rocket Lab. Rocket Lab is trading at a lower price-to-earnings ratio than Innovative Solutions and Support, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Innovative Solutions and Support has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Rocket Lab has a beta of 2.54, meaning that its stock price is 154% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations for Innovative Solutions and Support and Rocket Lab, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Innovative Solutions and Support | 0 | 2 | 1 | 2 | 3.00 |
| Rocket Lab | 1 | 6 | 12 | 3 | 2.77 |
Innovative Solutions and Support presently has a consensus target price of $16.25, suggesting a potential downside of 11.06%. Rocket Lab has a consensus target price of $110.18, suggesting a potential upside of 63.59%. Given Rocket Lab’s higher possible upside, analysts plainly believe Rocket Lab is more favorable than Innovative Solutions and Support.
Insider & Institutional Ownership
28.5% of Innovative Solutions and Support shares are held by institutional investors. Comparatively, 71.8% of Rocket Lab shares are held by institutional investors. 5.9% of Innovative Solutions and Support shares are held by insiders. Comparatively, 8.4% of Rocket Lab shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
Rocket Lab beats Innovative Solutions and Support on 8 of the 15 factors compared between the two stocks.
About Innovative Solutions and Support
Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottles, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight deck management system, a navigation and performance computer that upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.
About Rocket Lab
Rocket Lab USA, Inc., a space company, provides launch services and space systems solutions for the space and defense industries. The company provides launch services, spacecraft design services, spacecraft components, spacecraft manufacturing, and other spacecraft and on-orbit management solutions; and constellation management services, as well as designs and manufactures small and medium-class rockets. It also designs, manufactures, and sells Electron, a reusable orbital-class small rocket; and the Photon satellite platforms, as well as developing the Neutron 8-ton payload class launch vehicle; conducts remote launch activities; and designs and manufactures a range of components and subsystems for the Photon family of spacecraft and broader merchant spacecraft components. The company serves commercial, aerospace prime contractors, and government customers. Rocket Lab USA, Inc. was founded in 2006 and is headquartered in Long Beach, California.
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