Is Rocket Lab Stock a Compelling Buy Ahead of 2026?

The commercial space industry is on the cusp of a transformative era, driven by the impending initial public offering (IPO) of SpaceX and the operational strides of smaller players like Rocket Lab. As investors weigh the prospects of Rocket Lab (RKLB), the interplay between its business momentum and the looming shadow of SpaceX's $1.5 trillion valuation target demands careful scrutiny. This analysis evaluates whether Rocket Lab's stock warrants a place in a forward-looking portfolio, focusing on its operational performance, valuation dynamics, and the broader market implications of SpaceX's anticipated public market debut.

The SpaceX Effect: A Sector-Defining Catalyst

SpaceX's planned 2026 IPO, which could raise over $30 billion, represents more than a financing event-it is a potential validation of the commercial space sector's long-term potential according to reports. By demonstrating that a space-focused company can command a valuation surpassing even Saudi Aramco's 2019 IPO, SpaceX is likely to reshape investor perceptions. According to a report by , the mere announcement of SpaceX's IPO plans has already spurred gains in space stocks, including Rocket Lab, which saw its shares surge following the news. This "sector validator" effect could encourage capital to flow into smaller, publicly traded aerospace firms, particularly those with niche capabilities or defensible market positions as Morgan Stanley suggests.

However, the SpaceX IPO also raises questions about competitive dynamics. Rocket Lab, with its Electron rocket and growing presence in satellite communications, is often framed as a partial alternative to SpaceX in certain markets according to Simply Wall St. Yet, the scale of SpaceX's Starlink revenue-projected to reach $22–$24 billion in 2026-underscores the challenge for smaller players to capture meaningful market share. The key for Rocket Lab lies in its ability to differentiate itself through specialized offerings, such as its Neutron rocket and defense-related satellite services as reported by QuiverQuant.

Rocket Lab's Operational Momentum: A Foundation for Growth

Rocket Lab's third-quarter 2025 results highlight its accelerating trajectory. The company reported $155 million in revenue, driven by 17 Electron launch contracts-a record for the firm. This growth is underpinned by strategic investments, including the $325 million acquisition of Geost, which enhances its satellite communications and defense capabilities. Additionally, the company is preparing for the Neutron rocket's debut in early 2026, a heavy-lift vehicle designed to compete with SpaceX's Falcon 9 in certain segments as detailed in QuiverQuant's analysis.

Valuation Dynamics: Premium Pricing in a High-Stakes Sector

Rocket Lab's stock currently trades at a price-to-sales (P/S) multiple of 46x, significantly above the industry average as noted on Trefis. This premium reflects both its technological progress and the broader market optimism stoked by SpaceX's IPO plans. Analysts have responded with cautious optimism, with several issuing "Buy" or "Overweight" ratings and price targets as high as $83 according to Simply Wall St.

Yet, such a valuation is not without risks. The P/S multiple assumes sustained revenue growth and a favorable market environment. If Rocket Lab fails to meet its launch cadence or if the broader space sector faces a correction, the stock could become vulnerable to volatility. Moreover, the anticipated SpaceX IPO may create a "gravity well" effect, drawing investor attention and capital away from smaller players unless Rocket Lab can clearly demonstrate its unique value proposition.

Conclusion: A Calculated Bet on Sector Synergy

Rocket Lab's stock presents a compelling case for investors who believe in the long-term expansion of the commercial space industry. Its operational momentum, particularly in satellite communications and reusable rocketry, positions it to benefit from the sector's tailwinds. The SpaceX IPO, while a formidable competitor, could paradoxically enhance Rocket Lab's prospects by legitimizing the sector and attracting new capital.

However, the high valuation multiple demands that Rocket Lab deliver on its strategic initiatives-particularly the Neutron rocket's debut and the integration of Geost's capabilities. For those willing to tolerate near-term volatility in exchange for exposure to a sector poised for disruption, Rocket Lab offers a high-conviction opportunity. The key question is whether the company can maintain its growth trajectory while navigating the gravitational pull of SpaceX's impending public market dominance.