Space Stock Face-Off: Is Rocket Lab or AST SpaceMobile Worth Your Money Right Now?

Rocket Lab (NASDAQ: RKLB) and AST SpaceMobile (NASDAQ: ASTS) are arguably two of the hottest and most popular space stocks on (or off) the planet now. That's probably going to remain the case for a while -- at least until SpaceX conducts its IPO this summer.

In the meantime, though, which of these popular space stocks should you choose to invest in?

Image source: Getty Images.

Rocket Lab reports

As luck would have it, both companies just published their Q1 earnings -- just in time to help you decide. Let's start by reviewing the results from Rocket Lab, which reported Thursday evening, May 7.

Headlining the report, Rocket Lab boasted that it exceeded its own guidance for "all guidance metrics including revenue, margin, and adjusted EBITDA," and Yahoo! Finance data confirm that the company beat analyst earnings forecasts as well. Q1 revenue grew 63.5% year over year to $200.3 million, with the company's best-ever gross profit margin on that revenue -- 38.2%.

Operating costs ate up all of Rocket Lab's gross profit regardless, but grew only 40.4% year over year. This meant that Rocket Lab lost money for the quarter -- $0.07 per share -- but its losses continue to narrow as revenue growth outpaces cost growth. One year ago, losses were $0.12 per share.

Free cash flow continues to be worse than reported GAAP losses, however, with Rocket Lab burning $77.4 million in the quarter. (But last year's Q1 cash burn rate was $82.9 million, so again -- an improvement.)

Rocket Lab guidance

On guidance, Rocket Lab advised investors to expect continued revenue growth in Q2, currently underway, with revenue up as much as 20% sequentially. Gross profit margins will retreat from their record levels, falling to between 33% and 35%, however, and operating costs will continue to rise.

Analysts polled by S&P Global Market Intelligence think all this will add up to a steady level of losses, about $0.08 per share in Q2 and $0.07 again in Q3, followed by a significant narrowing in Q4 -- a $0.05 loss -- with full-year 2026 losses totaling $0.27 per share.

Analysts don't expect Rocket Lab to report GAAP profits or generate positive free cash flow before late 2027, with both numbers turning solidly profitable only in 2028.

Long story short, Rocket Lab's business is going strong and indeed growing rapidly, with 70 rocket launches in its manifest for the future (including launches of the new Neutron medium-lift rocket). The company is continuing to roll up the space industry and transform itself into a vertically integrated, end-to-end space provider, completing its acquisition of laser communications provider Mynaric in Q1 and planning an acquisition of space robotics company Motiv Space to close in Q2.

But Rocket Lab stock still remains a few years away from profitability.

AST SpaceMobile reports

Next up is AST SpaceMobile, which reported its Q1 earnings on Monday evening, May 11.

In contrast to Rocket Lab, which beat on sales, earnings, and guidance last week, AST SpaceMobile missed on all three metrics in its own Q1 report Monday. The direct-to-cell communications satellite pioneer lost $0.66 per share, where Wall Street expected only a $0.21 per-share loss. It also reported revenue of only $14.7 million, where analysts wanted $37.5 million, and guided for about $175 million in full-year revenue -- below the $181.1 million that Wall Street will want to see.

Revenue growth was still impressive, up 20-fold year over year and, depending on how you define cost of revenue, AST may have achieved a positive gross margin of 21% for the quarter. Operating costs grew 158% year over year, however, eating up all of AST's gross profit and leaving the satellite operator with a $0.66 loss on the bottom line -- triple last year's net loss.

Cash burn was a smoking-hot $327.4 million -- $427.4 million, counting "capital advances" to bankrupt Ligado Networks, which is leasing its L-Band spectrum to AST SpaceMobile. If AST maintains the same rate of cash burn seen in Q1 throughout the year, it will consume much ($1.3 billion) of its $3.5 billion cash hoard over the remainder of the year. Analysts forecast a full-year cash burn rate of $1.8 billion.

AST SpaceMobile guidance

AST SpaceMobile lost its seventh BlueBird satellite in a botched Blue Origin rocket launch last month, but insists its next three satellites, BlueBirds 8, 9, and 10, are all ready to go to orbit atop a SpaceX rocket in June.

Meanwhile, AST is working on assembling BlueBirds 11 through 33 and expects to have 45 satellites in orbit by the end of the year, which should enable AST to finally begin offering commercial DTC service. The company has not, however, set a date yet for beginning beta service on its network. With the year nearly half over, growing the satellite count fivefold from here sounds ambitious -- and potentially unrealistic.

At the extreme valuations space stocks are all fetching in the run-up to the SpaceX IPO, I honestly can't recommend either Rocket Lab or AST SpaceMobile stock right now. But of the two, Rocket Lab does appear to have the clearer path to profits.

Rich Smith has positions in Rocket Lab. The Motley Fool has positions in and recommends AST SpaceMobile and Rocket Lab. The Motley Fool has a disclosure policy.