Prediction: Rocket Lab Stock Is a Buy Before Feb. 26

Small rocket specialist Rocket Lab (NASDAQ: RKLB) reports fourth-quarter earnings after close of trading on Thursday, Feb. 26. A lot of investors seem afraid of the report, and Rocket Lab stock has sold off nearly 20% in the month before earnings.

I disagree. In fact, I think there's a pretty good chance Rocket Lab stock will...well, rocket after the company reports earnings. And now I'll tell you why.

Image source: Rocket Lab.

Rocket Lab by the numbers

My opinion on Rocket Lab has little to do with valuation. When I look at Rocket Lab stock trading for more than a 62 price-to-sales ratio -- and infinity times the profits it isn't yet earning -- I cannot call Rocket Lab stock a "buy" at its current share price of $70 and change.

I'll be blunt: Even at 20% off, I believe Rocket Lab stock is still overvalued at this price.

I don't necessarily know that Rocket Lab is going to "beat earnings," either. Analysts polled by S&P Global Market Intelligence predict Rocket Lab will lose $0.10 in Q4 2025, the same losses it reported in 2024's Q4. This seems unlikely, given that these same analysts are forecasting Rocket Lab to grow its sales nearly 35% year over year, and given that we know Rocket Lab launched nearly twice as many missions in Q4 2025 as it did in Q4 2024.

More rocket launches, more revenue, and greater production scale would seem to imply fewer losses for Rocket Lab and thus an improvement in "earnings."

Reading between the numbers

A cheaper stock price combined with better sales and earnings are both good reasons to expect Rocket Lab stock to go up after earnings this week. But they're not the main reason I predict Rocket Lab stock will go up.

Last year, if you recall, Rocket Lab publicly promised to launch its new Neutron reusable rocket by the end of 2025 -- then changed its mind. At last report, management was still hemming and hawing over whether to announce a Q1 2026 or Q2 2026 launch. I would be shocked if Rocket Lab does not settle this question for us when reporting earnings this week and set a target launch date for Neutron.

If I had to wager, I'd probably lean toward expecting a Q2 launch date. And if I'm right about that, Rocket Lab may disappoint some investors when it tells us it will take a few more months to get Neutron off the ground. That said, if there's one thing the stock market really hates, it's uncertainty.

Rocket Lab has a chance to remove uncertainty surrounding Neutron this week. I predict the stock will go up when it does.

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