Rocket Lab Stock Is Down 14%. Is It Finally Time to Buy?

The SpaceX IPO, slated to launch in mid-2026, has investors buzzing about the growing space economy. One standout competitor is Rocket Lab (NASDAQ: RKLB), which is carving out its own spot in the space launch industry.

Over the past year, Rocket Lab soared to impressive heights, reaching nearly $100 per share in mid-January. Although the stock has since dipped 14% from its 52-week high, now might be a good time to scoop up shares of the space stock. Here's why.

Rocket Lab had a setback in January

When it comes to launching rockets into space, SpaceX holds a commanding lead. However, Rocket Lab has carved out a niche of its own in the small-payload market with its small-lift launch vehicle, Electron. The company is the second-most-used launch company in the United States and aims to better compete for larger payloads with its medium-lift, reusable launch vehicle, Neutron.

The company hoped to launch Neutron this year, but in January, a Stage 1 fuel tank ruptured during a hydrostatic pressure test. The good news is that Rocket Lab discovered the issue before launch, but the bad news is that it delayed Neutron's launch to the fourth quarter of this year.

This puts some of Rocket Lab's larger launches on the back burner for at least a couple more quarters, and was a big reason for the company's dip since January.

Positive news continues to unfold for Rocket Lab

The dip in Rocket Lab stock looks like an opportunity for long-term investors. For one, the company still plans to launch Neutron later this year, which will give it the opportunity to carry larger payloads and thus earn higher profits per launch.

Additionally, Rocket Lab is expanding its defense and national security capabilities. In mid-March, it signed a $190 million contract for 20 hypersonic test flights using the HASTE launch vehicle, which is a suborbital variant of its Electron vehicle.

Image source: Rocket Lab.

On April 9, Rocket Lab signed a deal for three Electron launches for the Q-Shu Pioneers of Space (iQPS) starting in 2028. This is a Japanese satellite manufacturer and operator that has become a significant customer of Rocket Lab, with 15 contracted missions.

Beyond missions, Rocket Lab also provides iQPS with the Motorized Lightband separation systems used to deploy satellites. This is part of its growing space systems business, which provides spacecraft design, manufacturing, software, and components, and has become a fast-growing component of its overall space business.

Buy the dip on Rocket Lab

Rocket Lab's backlog now stands at $1.85 billion, with space systems accounting for 74% and launch services accounting for the remainder. Analysts project strong growth, with revenue increasing to $870 million this year and $1.2 billion in 2027.

Rocket Lab is growing quickly, and its space systems business is becoming an increasingly important component of its overall growth. The company also stands to benefit when its Neutron rocket finally takes off, boosting earnings and margins. If you're bullish on the long-term outlook for the space economy and want to play that upside over the next decade and beyond, Rocket Lab looks like an excellent buy today.

Courtney Carlsen has positions in Rocket Lab. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.