Rocket Lab's Stock Performance Ahead of Q2 Earnings

Rocket Lab's stock has surged over 70% YTD, driven by investor appetite for space stocks. The company is set to report Q2 earnings, which could impact its stock price. As a finance expert, I would recommend keeping an eye on Rocket Lab's financial performance and future prospects before making a buy decision.

Rocket Lab's stock has surged over 70% year-to-date (YTD), driven by investor appetite for space stocks. The company is set to report its second-quarter (Q2) earnings, which could significantly impact its stock price. As a finance expert, it is essential to keep an eye on Rocket Lab's financial performance and future prospects before making a buy decision.

Rocket Lab (NASDAQ:RKLB) is transitioning from a launch vehicle company to an orbital infrastructure platform. The company's long-term strategy focuses on monetizing orbital data and transitioning from a launch vendor to a high-margin infrastructure platform. The key catalyst for this transition is Neutron, a project that underpins access to the $5.6 billion NSSL Phase 3 Line 1 opportunity [1].

While consensus expects approximately $135 million in revenue and a -$0.08 EPS loss for Q2 2025, investors should not judge the quarter by GAAP earnings alone. Rocket Lab has exceeded EPS consensus 7 out of the last 12 quarters, demonstrating its ability to control Wall Street optics [1]. More impactful than near-term EBITDA volatility is the trajectory of quality revenue and the cadence of milestones, particularly Neutron's readiness.

Stifel has raised its price target on Rocket Lab USA to $55.00 from $34.00, maintaining a Buy rating ahead of the Q2 earnings report. The stock has delivered remarkable returns, surging over 855% in the past year and 74% year-to-date [2]. Stifel expects an in-line performance including sequential revenue growth of 10.1% and gross margin improvement of 187 basis points.

Rocket Lab's vertical integration strategy, while a moat on paper, also puts operational risk at the center of things. A bottleneck at production, sluggish integration of Mynaric, or suboptimal realization of the ASP from the Electron mission could damage belief in its Space Systems-as-a-Service transition [1]. Any vulnerability of national security contract clarity, especially at the $5.6 billion NSSL Line 1 pipeline, may squeeze the optionality premium built into the stock.

Rocket Lab's Q2 earnings should be seen not as a test of profitability but as a checkpoint on the transition to orbital infrastructure. If execution matches the vision, today's optical premium may turn out to be a bargain in hindsight. The company's ability to monetize sovereign-grade orbital data over decades, not quarters, is what will create valuation durability.

Investors must listen as much to headline revenue as to the levers of cadence and data monetization, as well as the shape of the schedules of the programs of the Neutrons, to decide if Rocket Lab still deserves its premium or gravity asserts its grip.

References:
[1] https://seekingalpha.com/article/4808635-rocket-lab-q2-preview-the-most-important-earnings-yet-reiterate-buy
[2] https://www.investing.com/news/analyst-ratings/stifel-raises-rocket-lab-usa-stock-price-target-to-55-on-neutron-progress-93CH-4170637