Rocket Lab Falls This Year: A Hidden Chance in the Space Economy?

Tradingkey - Over the past year, Rocket Lab USA Inc. (RKLB) has been one of the brightest stars in the space sector. The stock multiplied several times, and the company’s story expanded from launching small rockets to developing its heavy‑lift vehicle, Neutron. Yet after posting a record‑setting quarterly report, the share price has retreated sharply, prompting the market to reprice the narrative.

A Record‑Breaking Quarter

Judging purely from the results, Rocket Lab delivered the kind of earnings report that normally sends a stock higher.

Revenue reached an all‑time high. In 2025, full‑year sales exceeded US $600 million, up roughly 40% year on year, marking a decisive step‑up from tens of millions in revenue to nearly US $200 million per quarter. Fourth‑quarter revenue of about US $180 million also set a new single‑quarter record — slightly above consensus — showing that both the launch services and space systems segments are scaling together.

Profitability is improving as well. The adjusted quarterly loss came in well below expectations, and the loss ratio continued to narrow. Gross margin has now climbed into the 30% range, or even higher — a significant milestone for a space company still deep in its investment phase. It signals a shift from pure cash burn toward a model of genuine operational quality.

That progress stems largely from a higher launch cadence, which spreads fixed costs across more missions, and from a rising share of space‑systems revenue — satellite platforms, components, and related services — all of which carry stronger margins. The order backlog has swelled to nearly US $2 billion, up sharply from a year earlier, with major long‑term contracts such as those from the U.S. Space Development Agency (SDA) forming an important anchor.

Management’s outlook for the first quarter of 2026 was correspondingly upbeat: continued high‑speed revenue growth and sustained profit margins. On those numbers alone, investors had every reason to keep assigning Rocket Lab a high‑growth premium.

Bad News Overtakes the Good: Another Neutron Delay

However, what weighed on the stock in the short term was not the income statement — it was the new timeline revealed for the Neutron program on the earnings call.

Neutron, the company’s heavy‑lift rocket, is intended to represent Rocket Lab’s leap from small‑launch specialist into the broader market for medium and large payloads. The maiden flight was originally targeted for early 2026. A successful debut would expand the company’s addressable market and lift its long‑term revenue ceiling dramatically.

But management disclosed that structural issues had surfaced during early‑year testing of the main propellant tank. Investigation traced the problem to a defect in third‑party hand‑layup processes. As a result, the first launch has been postponed to the fourth quarter of 2026. The delay extends both the R&D cycle and the capital‑expenditure phase, increasing near‑term cash‑flow and loss pressure. More importantly, every model forecasting Neutron’s future revenue contribution or valuation impact must now shift its timeline to the right.

Behind the Pullback

From a trading perspective, sentiment has swung from “only the long view matters” back toward “near‑term execution counts too.” During the earlier frenzy around space stocks, investors were willing to pay for distant possibilities. After several rounds of valuation compression, the mood is clearly more cautious.

The current decline therefore isn’t a verdict on whether Rocket Lab’s fundamentals are strong or weak; it’s a reset of rhythm. Lengthened schedules and implementation risk remind investors that this journey isn’t a straight uphill climb but rather a volatile, high‑risk trajectory with inevitable bumps along the way.