$10,000 Invested in Rocket Lab 3 Years Ago Is Worth This Much Today, Even After a 61% Drawdown.

Three years ago, on Aug. 1, 2023, shares of Rocket Lab (NASDAQ: RKLB) closed at $7.26. As of this writing, they trade at $58.60. That's a return of about 8.1 times, which means a $10,000 investment made that day is worth about $81,000 today.

For comparison, the same $10,000 in an S&P 500 (SNPINDEX: ^GSPC) index fund would have grown to roughly $16,000 over the same stretch -- a good result by any normal standard, and not remotely close.

And here's the part that makes the number more impressive, not less: it survives a brutal drawdown. Rocket Lab peaked at $151 within the past year, meaning shares have fallen about 61% from their high. Even so, the three-year investor is sitting on about eight times their money.

Here's a look at what built that gain, and what has been taking it apart.

Image source: Getty Images.

Where the return came from

The gain wasn't just a hot space trade. Rocket Lab's business grew into it.

Revenue climbed from $245 million in 2023 to $436 million in 2024 to a record $602 million in 2025 -- a 38% increase last year and nearly two-and-a-half times the 2023 figure. The company's Electron rocket flew a record 21 missions in 2025, up from 16 the year before.

Interestingly, most of the money doesn't come from launches. Rocket Lab's space systems segment, which builds satellites and the components that go inside them, generated 67% of 2025 revenue. The company many investors still think of as a rocket stock is mostly a satellite manufacturer.

The momentum has carried into this year. First-quarter revenue rose about 63% year over year to a record $200.3 million, an accelerating pace next to last year's growth. Even more, the company's backlog climbed to a record $2.2 billion, up from $1.85 billion at the end of 2025. Management guided for another record in the second quarter, with revenue of $225 million to $240 million. And on July 27, Rocket Lab announced a $266 million contract with the U.S. Space Force for suborbital launch missions, the largest launch contract in the company's history.

Add the coming debut of Neutron, the company's larger rocket, now targeted for late this year, and the operating side of this business has rarely looked stronger.

What the drawdown changed

The growth stock's slide hasn't tracked those operating wins. Shares peaked in late May, drifted lower into the summer, and took their hardest hits in July. Interestingly, the year's biggest strategic swing was greeted as good news: the stock rose sharply on June 29, the day Rocket Lab announced an agreement to acquire satellite communications operator Iridium Communications at an enterprise value of about $8 billion.

What that deal does change is the financial picture ahead. The appeal is easy to see, since Iridium brings an operating satellite network and recurring subscriber revenue. But the price is enormous next to Rocket Lab's roughly $680 million of trailing-12-month revenue. And the company isn't yet profitable -- its net loss over that same stretch topped $180 million.

The financing plan leans on commitments for a $3.6 billion bridge loan, with cash from Rocket Lab's balance sheet and other debt and equity financing sources expected to fund the cash component. And the deal isn't expected to close until mid-2027, so shareholders could be living with that uncertainty (how much new debt, how many new shares, and at what prices) for a long time.

Of course, even after the drawdown, the valuation asks a lot. At a market capitalization of about $35 billion, Rocket Lab trades at more than 50 times its trailing-12-month revenue.

So what should investors take from the $81,000? Ultimately, the return was earned by a business that kept compounding (revenue, launches, backlog) through swings that could have shaken out most holders (shares traded as low as $37.57 within the past year alone). So tenacious holding through all the volatility was key.

Looking ahead, the next three years hinge on two things the last three never faced: Neutron flying on schedule, and what the Iridium financing ultimately costs shareholders. I think the operating business has earned the benefit of the doubt. But the balance sheet hasn't yet. For this reason, I'd personally keep any position in the stock small for now. And I wouldn't let a 61% drawdown alone convince me the stock is cheap.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.