Rocket Lab (NASDAQ:RKLB) Shares Gap Down Following Weak Earnings

Rocket Lab Corporation (NASDAQ:RKLB)’s share price gapped down prior to trading on Tuesday following a weaker than expected earnings announcement. The stock had previously closed at $58.86, but opened at $54.99. Rocket Lab shares last traded at $59.0950, with a volume of 7,117,487 shares trading hands.

The rocket manufacturer reported ($0.12) EPS for the quarter, missing the consensus estimate of ($0.07) by ($0.05). Rocket Lab had a negative return on equity of 6.48% and a negative net margin of 21.51%. The business had revenue of $267.83 million during the quarter, compared to the consensus estimate of $257.21 million.

Trending Headlines about Rocket Lab

Here are the key news stories impacting Rocket Lab this week:

• Positive Sentiment: Q3 revenue rose 73% year over year to $267.8 million, beating estimates, while backlog grew 52% sequentially to a record $3.57 billion. Rocket Lab forecast Q4 revenue of $270 million to $290 million, above consensus. Company Q3 results and outlook
• Positive Sentiment: Rocket Lab secured more than $515 million in Neutron launch deals during Q3, bringing the rocket’s backlog to 16 missions and lifting the listed base price to $70 million. Neutron launch contracts
• Neutral Sentiment: Analyst views were mixed: KeyCorp reaffirmed its Overweight rating and $100 target, while Piper Sandler cut its target to $58 and Cantor Fitzgerald lowered its target to $111 but kept an Overweight rating. Analyst forecast changes
• Negative Sentiment: Q3 EPS of -$0.12 missed the roughly -$0.07 consensus, and the net loss widened to $80 million. Reports also cited a wider-than-expected Q4 adjusted EBITDA loss outlook, raising concerns about costs and margins despite the revenue growth. Q3 earnings reaction
• Negative Sentiment: Investors also weighed Neutron’s first launch remaining scheduled for 2027, extending execution risk for a key growth program. Neutron timeline analysis

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on RKLB shares. Piper Sandler decreased their price objective on shares of Rocket Lab from $83.00 to $58.00 and set a “neutral” rating for the company in a report on Tuesday. Citizens Jmp cut their target price on Rocket Lab from $130.00 to $90.00 and set a “market outperform” rating on the stock in a report on Friday, October 16th. BTIG Research reaffirmed a “neutral” rating on shares of Rocket Lab in a research report on Tuesday. Raymond James Financial began coverage on Rocket Lab in a research note on Friday, September 11th. They set an “outperform” rating and a $80.00 price target for the company. Finally, Bank of America lowered their price objective on Rocket Lab from $115.00 to $110.00 and set a “buy” rating on the stock in a report on Monday, August 31st. Three investment analysts have rated the stock with a Strong Buy rating, fifteen have issued a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, Rocket Lab has a consensus rating of “Moderate Buy” and a consensus target price of $100.10.

Insiders Place Their Bets

In related news, SVP Arjun Kampani sold 6,034 shares of the business’s stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $66.65, for a total transaction of $402,166.10. Following the transaction, the senior vice president owned 250,917 shares of the company’s stock, valued at approximately $16,723,618.05. The trade was a 2.35% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Nina Armagno sold 10,926 shares of the company’s stock in a transaction on Monday, November 2nd. The shares were sold at an average price of $52.78, for a total transaction of $576,674.28. Following the transaction, the director owned 100,496 shares of the company’s stock, valued at approximately $5,304,178.88. The trade was a 9.81% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 551,832 shares of company stock valued at $34,940,037 in the last 90 days. 8.40% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Large investors have recently made changes to their positions in the stock. Hilton Head Capital Partners LLC lifted its stake in shares of Rocket Lab by 3,590.0% in the third quarter. Hilton Head Capital Partners LLC now owns 369 shares of the rocket manufacturer’s stock valued at $26,000 after buying an additional 359 shares during the period. Meeder Asset Management Inc. acquired a new position in Rocket Lab in the 2nd quarter valued at approximately $30,000. Highland Investment Advisors LLC acquired a new position in Rocket Lab in the 2nd quarter valued at approximately $30,000. NBH Bank bought a new stake in shares of Rocket Lab in the 2nd quarter worth approximately $30,000. Finally, Cherry Tree Wealth Management LLC bought a new stake in shares of Rocket Lab in the 2nd quarter worth approximately $32,000. Institutional investors and hedge funds own 71.78% of the company’s stock.

Rocket Lab Price Performance

The company has a market cap of $35.62 billion, a P/E ratio of -219.05 and a beta of 3.15. The stock has a 50-day simple moving average of $62.45 and a 200 day simple moving average of $78.80. The company has a debt-to-equity ratio of 0.01, a quick ratio of 4.98 and a current ratio of 5.48.

About Rocket Lab

Rocket Lab is a space company that provides launch services and spacecraft and satellite systems for commercial, civil, and national security customers. Founded in 2006 by Peter Beck, the company operates internationally, with headquarters in Long Beach, California, and launch operations in New Zealand and the United States.

Its launch business centers on Electron, a small orbital rocket designed to carry satellites to space, and HASTE, a suborbital vehicle used for hypersonic test missions.