SpaceX has been an incredible investment and went from zero to a rating of $ 350 billion in about two decades. That is, for those who can buy a ownership of ownership in the company. The Private Space Flight Giant has remained famous since its foundation in 2002, even if it grows until previously unprecedented heights. Patience is aimed at frustration for those waiting on the sidelines.
What if I told you that there was a chance to buy a company that is comparable to SpaceX at a much smaller market capitalization? That is stock Rocket Lab(Nasdaq: RKLB)A listed rocket and space company that pops at SpaceX’s heels. If you’ve been waiting for SpaceX for years, Rocket Lab can be a perfect stock for you. This is why.
With the turnover reportedly more than $ 10 billion in 2024, SpaceX has been dominating the private rocket launch market with minimal competition for years. Now Rocket Lab seems to be the second successful player in this sector.
With its small rocket called Electron, Rocket Lab has been able to win contracts from customers who do not need the large loads available on SpaceX. Rocket Lab offers precision where SpaceX Bulk offers. The electron rocket carried out 16 successful missions in 2024, making it the only other company in addition to SpaceX that regularly performs commercial missions.
In addition to the sale of launch services, Rocket Lab will build and develop space systems for customers. These include items such as solar energy tiles, space capsules and other structures. Combined, the company has compiled remarkable growth in recent years, so that income in 2021 to $ 436 million in 2024 of less than $ 100 million yields on its stock market introduction.
Profitability is still a concern. Rocket Lab placed an operational loss of $ 190 million in 2024. This is something to keep an eye on, but is not the end of the world, considering how much Rocket Lab insists on expansion and seeing fantastic revenue growth. There is a huge opportunity for the company to check, with the space economy that is worth hundreds of billions of dollars every year to spend expenses.
So what does Rocket Lab burn all this money for? Because it ultimately wants to compete directly with SpaceX in a larger launch of the payload. The most important product product in development is the neutone system, which promises to considerably increase the loading capacity with regard to the electron. According to reporting, this rocket costs $ 50 million per launch, which means that a significant income option for Rocket Lab if this can consistently launch only a few times a year (or more).
Neutron is planned for a test flight in 2025, however, some investment analysts believe that the timeline should be delayed and therefore Bearish in the stock. It will not be the end of the world if Neutron has a setback, but the rocket has to get started within a few years. Otherwise Rocket Lab will probably see enormous losses and they will have to raise money through debts or shares.
The other segment with a lot of potential is what Rocket Lab calls space applications. This segment is still in its development phase, but from what we know publicly, the company wants to build its own constellation of satellites and sell software and services to third parties.
Instead of a company that Rocket Lab pays to launch its own satellite in space, Rocket Lab will, for example, do everything himself and simply sell these possibilities to the same customer – a valuable proposition and a different way for Rocket Lab to increase its presence in space. However, this segment is very speculative and will not be useful for the financial data of the company for years.
RKLB Revenue (TTM) -Data by Ycharts
Rocket Lab Stock is a double -edged sword. On the one hand you have a fantastic track record of reliable launch of rockets and rapid revenue growth. On the other hand, we have a great combustion of cash and uncertainty within the Neutron and Space Applications division.
The best way for an investor to buy Rocket Lab is to have the dollar costs average (DCA) in the share over time. In this way you can continue to add to the function if the company continues to perform on its growth process. If the wheels start to lose weight, you can sell without placing a large part of your portfolio in this risky stock.
Nowadays Rocket Lab acts on a market capitalization of $ 9.5 billion, giving or taking. That is a price sales ratio (p/s) of 21 for a company with low gross margins. What this means is that Rocket Lab has a premium multiple versus its current financial data, and that investors expect a lot of growth in the future. Don’t be afraid to buy the shares, but understand that this is a risky company to possess in your portfolio today.
Consider this before you buy stock in Rocket Lab USA:
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Brett Schafer has no position in one of the aforementioned shares. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.
Are you waiting to invest in SpaceX? Then this space was originally published by the Motley Fool for you
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