Shares of launch services and space systems provider Rocket Lab (NASDAQ:RKLB) slipped on Wednesday amid a soft outing for the broader market. Nevertheless, sentiment overall remains positive for RKLB stock, with the underlying company recently posting better-than-expected results for its second quarter. In addition, its wheeling and dealing contributed to a bullish consensus among Wall Street analysts.
On Tuesday afternoon, Rocket Lab reported a net loss of $45.9 million, or 10 cents per share, a CNBC article noted. According to analysts surveyed by Refinitiv, the consensus estimate called for a loss of 9 cents per share. Further, the red ink was wider than the loss of 8 cents in the same quarter one year ago.
However, on the top line, the space economy specialist posted revenue of $62 million. This tally represented a 12% year-over-year growth rate. As well, it beat the consensus view target $61.8 million.
In addition, Rocket Lab added contracts for 10 more launches in 2023 and 2024, CNBC stated. In addition, the launch services provider in its press release disclosed that it acquired assets and production space from the Virgin Orbit bankruptcy auction, which should help boost its Neutron launch vehicle development.
Analysts Are Enthused About the Potential for RKLB Stock
Although RKLB stock wobbled in the midweek session due in part to wider market drama, it’s been on a tear recently. In the trailing one-month period, shares gained over 9%. And in the past half-year period, they’re up over 43%.
In addition, Rocket Lab founder and CEO Peter Beck voiced strong confidence in the business, pointing to “three successful Electron [rocket] launches, more than 17 spacecraft featuring Rocket Lab satellite components deployed to orbit, and multiple new launch contracts signed with new and returning customers.”
Even better, analysts agree with the overall assessment, presenting a largely united bullish outlook.
- Morgan Stanley’s Kristine Liwag indicated that RKLB stock “still has room to run” despite its already robust performance. Specifically, she sees the enterprise benefiting from newer verticals like spacecraft and hypersonic products. Kiwag pegs RKLB as “overweight” with a $10 price target.
- Deutsche analyst Edison Yu appreciated Rocket Lab’s “strong headline results.” Although recognizing that the company’s space systems revenue came in a bit lower than expected, Yu emphasized “an increasingly stable high-margin business that faces limited competition.” The analyst rates RKLB stock a “buy” with a $10 price target.
- Bank of America’s Ron Epstein was impressed with “[y]et another strong quarter of results.” Further, the expert sees shares more than doubling, highlight the company’s “stronger than expected” gross margin rate in Q2. He has the highest price target among analysts at $14.
Not everyone was so enthusiastic, however. Citi’s Jason Gursky remarked that Rocket Lab’s Q3 sales guidance was about 20% below its estimate. Moving forward, the analyst will carefully watch the company’s execution.
Why It Matters
Overall, data from TipRanks shows that within the past three months, analysts view RKLB stock as a consensus moderate buy. This assessment breaks down as five buys, two holds and zero sells. On average, the experts’ price target lands at $9.81, implying about 50% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
