Rocket Lab Really (Really) Wants NASA to Pay It $4 Billion

Nearly a decade ago, a dark horse space mining operation by the name of Moon Express floated an outrageous idea: Build a spaceship, send it to the moon, collect moon rocks, ship them back to Earth... and sell them. It sounded like a madcap plan, but with moon rocks selling for up to $3.6 million per gram (on the black market), the idea did have a sort of piratical appeal to it. Turns out, moon rocks are worth a lot of money.

But Mars rocks could be worth a whole lot more.

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Drill baby drill (on Mars)

For the past four years, NASA's Perseverance Rover has been trundling around the surface of Mars, collecting 30 separate samples of the air and soil (so, Mars rocks) with the aim of having a parcel all packed up and ready, just in case NASA ever manages to send a rocket to collect them and bring them back home.

NASA actually has a plan to do that, the so-called Mars Sample Return or MSR mission. In theory, NASA wants to send a rocket to Mars, drop a lander down to the surface, collect Perseverance's mailbag and tuck it aboard another, smaller rocket, then shoot that rocket up to orbit, where the original rocketship can then take delivery and return the sample to Earth.

Simple, right?

There's just one problem: According to its experts, all of the above is going to cost way too much and take way too long to make the project feasible within a spending-constrained NASA budget. NASA's best guess is that MSR might cost $11 billion and take 15 years to complete.

But Rocket Lab (NASDAQ: RKLB) begs to differ.

Rocket Lab's plan for Mars

Earlier this year, the tiny rocket company that wants to grow up to be SpaceX someday told NASA that, if it's agreeable, Rocket Lab would be happy to perform MSR for it for the bargain price of just $4 billion and get the work done in just six years total.

Now, Rocket Lab isn't the only company bidding on MSR. To the contrary, everyone who's anyone in space, from SpaceX to Blue Origin to L3Harris (NYSE: LHX), Lockheed Martin (NYSE: LMT), and Northrop Grumman (NYSE: NOC) is also bidding on the contract. These other companies are all said to be bidding between $5.8 billion and $7.7 billion, however -- better than $11 billion, but still not cheap -- and wanting a decade to get the work done. NASA wants to take its time (18 months' worth) mulling the proposals before making a decision.

But Rocket Lab is getting impatient.

Rocket Lab really wants to go to Mars

In hopes of nudging NASA out of its slumber and getting a firm "yes" or "no" on its proposal, Rocket Lab CEO Peter Beck took to the Interwebs last week, running an op-ed piece on SpaceNews.com.

"Today we stand on the threshold of one of the most exciting moments in the history of space exploration: bringing a piece of another planet in our solar system back home," began Beck, presumably in his best "space, the final frontier" voice, before urging NASA once more to "accomplish MSR more quickly and affordably than the current proposed architecture."

Citing Rocket Lab's proven experience in building engines, guidance systems, and solar cells for spaceships, its experience sending spacecraft to other planets already, and its plans to do more such missions in the future, Beck once again pressed NASA to give Rocket Lab the green light to get this mission down, reiterating his promise to do the work for "under $4 billion" and get it done by 2031.

To sweeten the deal, Rocket Lab promised to do the work on a firm fixed-price basis.

Image source: Getty Images.

What this means for Rocket Lab

It remains to be seen whether NASA will come around to Rocket Lab's way of thinking or go with a pricier offer from a competitor. If Rocket Lab does win the MSR contract, however, this could be transformative for the company.

$4 billion, even spread over six years (that's $666 million per year), would be more revenue than Rocket Lab has ever made before, and all from a single contract. It would more than double Rocket Lab's expected revenue for this year from all its other work and account for about one-third of all the revenue the company is expected to make in 2028 (which is as far out as analyst estimates go for Rocket Lab).

Now, would MSR be profitable for Rocket Lab on the above terms? That remains to be seen. But if you're a Rocket Lab shareholder, these revenue numbers alone are probably reason enough to cheer on the company in its quest to win MSR, which would also be a prestige project for the company and open the doors to winning even more complex deep space work from NASA in the future.

With or without profits, MSR is a contract Rocket Lab would love to win. No wonder the CEO is so insistent that NASA should award it to Rocket Lab.

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Rich Smith has positions in Rocket Lab USA. The Motley Fool has positions in and recommends L3Harris Technologies. The Motley Fool recommends Lockheed Martin and Rocket Lab USA. The Motley Fool has a disclosure policy.