Rocket Lab Shares Dive 5.61% to Monthly Low After KeyBanc Downgrade Flags Priced-In Growth Catalysts

The share price fell to its lowest level since the start of the month today, with an intraday decline of 5.61%.

Rocket Lab’s stock slump followed a downgrade from KeyBanc Capital Markets, which cut its rating to Sector Weight from Overweight, citing concerns that key growth catalysts—such as the $816 million SDA Tranche 3 contract and Neutron rocket development—were already priced into the stock. The firm slashed its price target to $0.00, signaling a potential -100% downside over 12 months, despite Rocket Lab’s record $155 million third-quarter revenue in 2025 and a $1.1 billion contracted backlog. Analysts highlighted that while the company’s 34.74% year-over-year revenue growth and 21 successful Electron launches in 2025 underscore operational strength, near-term risks include unproven Neutron rocket progress and valuation concerns.

Technical indicators suggest mixed signals. Shares closed at $86.58 on January 15, 57.5% above its 100-day moving average, but an RSI of 73.57 signaled overbought conditions, raising short-term correction risks. Rocket Lab’s 253.72% annual gain contrasts with broader market underperformance on January 15, falling more sharply than the S&P 500. While Zacks maintains a “Strong Buy” rating, KeyBanc’s bearish stance reflects skepticism about near-term execution risks, particularly for unlaunched projects. The stock’s trajectory will likely hinge on securing additional large contracts and Neutron’s first launch, with analysts divided on whether these milestones justify its $47.09 billion market capitalization.