Should I Buy Rocket Lab (RKLB)? Finance YouTuber Analysis

The YouTuber mentions Rocket Lab as a stock he would consider buying more of if it drops to around $70, stating that it's a good long-term investment at that price.

“Although with Rocket Lab can go even closer to 70 bucks. I wouldn't mind that either. But yes, $75 $76. I I I don't think I could go wrong, especially not for a long-term investor.”

The YouTuber believes Rocket Lab's acquisition of Iridium significantly strengthens its position by creating a vertically integrated space powerhouse. This merger provides Iridium's profitable cash flow and valuable spectrum, which will fund Rocket Lab's growth and reduce reliance on external launch providers, accelerating its path to profitability and solidifying its long-term competitive moat in the space industry.

“This move solidifies Rocket Lab as in my opinion one of the biggest winners in the space industry. And yes, I do think that the 10x opportunity here from here on out has become easier, clearer, and it's not a question of if that's going to happen, but a question of when.”

The YouTuber is looking to accumulate more Rocket Lab shares if the price drops below $100, as he previously sold shares at higher prices. He has already added some shares at $88.80 and is willing to buy more if it goes even lower, specifically mentioning the low $70s as a strong support area.

“So, if I can reby all of those shares at under $100, I'll do that, right? Slowly but surely, I'll add more and more.”

The YouTuber, an 'extreme bull' on Rocket Lab, sees current prices as an opportunity to start adding shares again after taking profits earlier. He notes its inclusion in the NASDAQ 100 rebalancing as a potential positive catalyst and identifies key technical support levels for accumulation.

“So with Rocket Lab actually around these prices and you will see why I don't mind starting to add a little bit more.”

The YouTuber, a former owner, suggests avoiding Rocket Lab due to its extremely high valuation (50 times sales). He argues that even for a bullish long-term investor, such a price is not normal and implies paying for many years of future execution.

“I've said the same about Rocket Lab, a stock I owned. Trading at 50 times sales or whatever is not normal.”

The YouTuber would like to add more to Rocket Lab but finds it difficult at current prices above $100 per share, indicating a desire to buy if the price drops further.

“For me to start adding again to that position, well, I would like it to go even uh lower.”

The YouTuber discusses his current LEAP option position on Rocket Lab, which is technically in the money but currently showing a loss due to stock volatility. He explains that being in the money does not always equate to profit and outlines his strategy for managing the trade, including potential profit-taking or rolling the option if the stock recovers to his target price of $122 per share.

“Let's check out this option right now on Rocket Lab, ticker symbol LB. This is very interesting because I am technically in the money.”

The analyst likes the upside in Rocket Lab despite its high valuation (58 times expected sales) and recent sell-off. He points to strong forecasted sales growth of 51% this year, a significant backlog of 70 launches, and the upcoming Neutron rocket which will lower launch costs, suggesting continued revenue growth.

“And I do like the upside left in Rocket Lab ticker RKLB. After last week's brutal 19% sell-off and at a 53 billion market cap, it's still trading very expensive at 58 times expected sales, but those sales are expected higher by 51% this year.”

The analyst expresses a positive outlook on Rocket Lab, particularly ahead of its first medium-lift rocket launch later this year. Despite a high valuation at 77 times this year's revenue, its growing backlog of 70 launches and 51% annual sales growth suggest strong potential in the expanding space industry, offering flexibility and catering to customers who prefer dedicated launches over rideshares.

“That said, I do like Rocket Labs here ahead of its first medium lift rocket launch later this year. The larger payload at 13 tons is going to help it close that size and the efficiency gap with SpaceX.”

The YouTuber acknowledges Rocket Lab's significant growth in the space industry, offering end-to-end solutions and securing major contracts. While currently expensive at 27 times price to sales, he suggests accumulating shares for long-term growth, possibly waiting for a dip.

“It's not quite profitable yet, but is expected to get there by next year. This one is more expensive than most on our list though at 27 times price to sales. I wouldn't mind dipping into it at this price for that long-term growth, but I wouldn't go all in either. Maybe start accumulating some shares, but hold the bulk of your investment back to see if we can get a dip in the price.”

Joseph Hogue recommends buying Rocket Lab USA due to its strong schedule of 22 launches planned for the year, a growing backlog of $582 million, and improving profitability with gross margins up to 29%. He notes the company's healthy balance sheet with $288 million in cash against $61 million in debt, suggesting it could reach profitability next year despite current cash burn.

“rocket lab has a strong schedule of 22 launches planned this year double last year's manifest and that $582 million backlog in the third quarter was 9% increase from the previous”

The analyst rates Rocket Lab as a hold, finding its current valuation of 62x forward price-to-sales too rich despite its strong progress and pure-play space focus. He believes that while the company has significant upside, a more attractive entry point might emerge after the SpaceX IPO, which could cause industry-wide valuations to normalize.

“So, at these levels, I'm not ranking this as a buy. I'm rating Rocket Lab Corporation as a hold.”

The analyst highlights Rocket Lab's new electric propulsion thruster, which is already seeing high demand, and its strategic positioning in the growing European space and defense market. Additionally, the company secured its largest contract for Neutron launches at full market price, and is making significant investments in reusability, which could lower costs and expand market opportunities. These factors indicate strong long-term growth potential.

“Rocket Lab is certainly an interesting opportunity.”

The YouTuber expresses interest in Rocket Lab but advises waiting for a significant price drop. He notes the company's growth in rocket launches and satellite manufacturing but warns that the company's plan to sell up to $3 billion in stock, combined with SpaceX's upcoming IPO, could cause a substantial pullback, making a price in the low $90s an attractive entry point.

“In fact, I'm looking more like the low 90s, which is roughly a third of where it is today. And given that it competes directly with SpaceX, a move like that is very much on the table once SpaceX lands.”

The YouTuber recommends Rocket Lab (RKLB) for its role in space launch and defense technology, noting its significant growth (up 2700%). He connects this to increased NATO spending and global rearmament, positioning RKLB as a beneficiary of the defense sector's massive backlogs and future spending.

“Where would I rocket lab? RKLB hits up 2,79% from this 2700%. Yeah, it's a 40 billion company. They do space launch and defense technology.”

The YouTuber trimmed his Rocket Lab position twice, in January and March, because it had become a very large position and he felt its valuation was getting ahead of itself. He still owns a significant portion.

“In trimming Rocket Lab, I trimmed twice. Once in January when the stock was almost at $100 per share and again in uh March when it was above $70 per share. The idea there just being that uh it was a very very large position for me and I thought that it's uh I thought that its valuation was getting a little bit ahead of itself.”

The YouTuber trimmed his Rocket Lab position, reducing it to a single-digit allocation, because it had become one of his largest holdings despite its uncertain future. He notes that the company's valuation is difficult to assess due to the upcoming Neutron Rocket launch, which could significantly boost revenue, but the high allocation made him uncomfortable given the inherent risks.

“The reason that I trimmed it was just because a company with such an uncertain future had become one of my largest positions. So, I did not sell out of it entirely. I just paired it back to a more reasonable singledigit allocation within my own portfolio.”

Rocket Lab has seen a significant pullback of almost 40% from its peak, making it more compelling. While still highly valued with an EV/Sales of 40 and not yet profitable, the company is maturing, and its growth rate is picking up without a commensurate increase in losses, indicating improving operating leverage. The analyst is waiting for a further substantial price drop (50-75%) to buy, as the company is more mature than in 2024 but still needs to be acquired at an attractive price.

“Rocket Lab could fall in that territory. That's when I want to be a buyer.”

The YouTuber avoids Rocket Lab due to its negative net income and free cash flow, questioning its path to profitability and moat despite strong revenue growth. He notes the company is burning significant cash and its backlog has not increased substantially, making the risk-reward unfavorable at its current $21 billion valuation.

“But this is why I haven't bought the stock. These negative net income, negative fat-free cash flow numbers.”

The analyst views Rocket Lab as a more speculative, higher-risk company that he would buy during a significant market pullback. He notes its high valuation (20x sales) and cash burn, but is optimistic about its revenue growth and growing launch and space systems backlog, believing it will eventually achieve better margins.

“If there is a market pullback, this is one of those higher risk companies that could potentially fall significantly, and that's when I want to be opportunistically buying a company like Rocket Lab.”

Travis Hoium advises avoiding Rocket Lab despite recent news of potential new contracts, as the company remains unprofitable with negative net income and free cash flow. He notes the backlog isn't growing significantly and there's high competition, making it difficult to value the company without clearer visibility on future margins and profitability. He would prefer to see more progress on profitability and sustainable cash flow before considering it a buy.

“I don't think this is the kind of buy signal that I'm looking for for Rocket Lab. I do want to see a little bit more progress on profitability, on getting to operating profit, on being sustainable from a cash flow standpoint.”

The YouTuber sees Rocket Lab as a high-risk, high-reward opportunity, noting its 42% pullback from highs and a recent $5.6 billion contract with the US Space Force. He acknowledges its expensive valuation (EV/Sales almost 20) and lack of profitability but believes it's a strong contender in the space industry, competing with SpaceX, and the risk/reward balance is improving.

“So, a little bit more high risk for Rocket Lab, but the opportunity is there.”