You need some space?
Then Rocket Lab USA (RKLB) can help you out. Space is their speciality.
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The Long Beach, Calif.-based space-systems company is making its mark way up there in the cosmos, and its stock price has been zooming right along with it.
Let’s take a look at what’s been happening lately.
On Sept. 26, Rocket Lab said it had completed testing and integration of its second Pioneer spacecraft for Varda Space Industries, which is billed as the world’s first in-space pharmaceutical processing and hypersonic Earth re-entry logistics company.
The privately-held Varda designs, builds, and flies spacecraft that process pharmaceuticals in microgravity. The company targets small molecule crystallization, which is difficult to produce in Earth’s gravity, and brings the crystals back to terra firma.
Rocket Lab’s first Pioneer spacecraft for Varda was launched last year. Varda successfully crystallized the HIV drug Ritonavir while in orbit and the two companies landed the re-entry capsule in the Utah desert in February
“This close collaboration allows us to push the boundaries of innovation, enabling Varda to create high-value products in microgravity and bring them back to Earth,” Rocket Lab Founder and CEO Peter Beck said in a statement.
Rocket Lab CEO: ‘we’re at a distinct advantage’
“We’re excited to work alongside Varda as they revolutionize manufacturing processes and open new markets through space,” he said.
A few days earlier, Rocket Lab said it had launched its 53rd Electron mission and deployed five satellites to Low Earth Orbit for French Internet-of-Things (IoT) company Kinéis.
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The “Kinéis Killed the RadIOT Star” lifted-off from Rocket Lab Launch Complex 1 in Mahia, New Zealand.
The mission launched three months after “No Time Toulouse,” Kineis’ first launch with Rocket Lab, and marks the second of five dedicated Electron launches for the French company.
Last month, Rocket Lab beat Wall Street’s second-quarter earnings and revenue expectations.
The company posted a loss of 8 cents per share, compared with a loss of 10 cents per share a year ago. Revenue totaled $106 million, a company record, and up 71% from a year ago.
Wall Street had been expecting Rocket Lab to report a loss of 10 cents per share on $105 million in sales.
“By owning launch and spacecraft, we’re at a distinct advantage when it comes to establishing our own space capabilities or constellations,” Beck told analysts during the company’s earnings call in August. “We can build and launch our own spacecraft at cost and we don’t have to wait in-line for limited launch capacity.”
“We completely avoid the pain point that most constellation operators face, being at the mercy of suppliers on cost and schedule, often causing deeply disruptive delays and bringing capability online at scale,” he added.
The company is scheduled to report quarterly results in November. Analysts are calling for the company to report an adjusted loss of 8 cents per share on $102.4 million in revenue.
Rocket Lab shares closed up nearly 13% on Sept. 27 to $9.78 per share. The stock is up 77% year-to-date and a stunning 130.1% from a year ago.
The shares got a boost when KeyBanc analyst Mike Leshock raised his price target on Rocket Lab on Sept. 27 to $11 from $8 while maintaining an overweight rating on the stock, according to The Fly.
The firm hosted a non-deal roadshow with Rocket Lab and came away with increased confidence in the company’s ability to scale its business.
Veteran trader staying long with Rocket Lab
Leshock said that he continues to believe Rocket Lab is positioning itself to be an industry leader in both launch services and satellite manufacturing and design.
MP Securities analyst Trevor Walsh initiated coverage of Rocket Lab on Sept. 12 with a market perform rating and no price target.
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Rocket Lab is an end-to-end space company that designs and manufactures small- and medium-class rockets and specialized spacecraft, Walsh said.
The firm is on the sidelines due to potential near-term risks and challenges placing pressure on the stock, but thinks there are “several strong, fundamental aspects” to Rocket Lab that could eventually lead it to be more positive on the name.
The challenges include cost of launch concerns, growing competition and remaining uncertainty specific to the Neutron medium-lift launch vehicle, which is currently under development, as well as financial “vulnerabilities” and the competitive threat posed by Tesla (TSLA) CEO Elon Musk’s SpaceX, the biggest private space company.
TheStreet Pro’s Chris Versace has been keeping an eye on Rocket Lab, writing on Sept. 27 that “the shares have been hot this week, and now have apparently gone somewhat parabolic…”
“I will be staying long this name, and probably a lot of it, for quite some time,” he wrote. “That said, as my target price has been breached in force, I will take something off of my position, as that is how my code of discipline rolls.”
Versace, who recently increased his price target for Rocket Lab to $9.50 from $7.50, noted that KeyBanc analyst Philip Gibbs reiterated his buy rating on the company while boosting his target price to $11 from $8.
“I do not yet have a new target price to go off of, so we’ll act again should the stock somehow take out Gibbs’ new target,” Versace said. “Until then, we wait for a new technical pattern to develop in a way that we can identify a new pivot point.”
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