Why Rocket Lab Stock Zoomed 28.5% Higher In April

Shares of Rocket Lab (NASDAQ: RKLB) jumped 28.5% in April, according to data from S&P Global Market Intelligence. The rocket maker and fast-growing space economy company saw its stock price rise on Wall Street price target upgrades, an increased backlog, and continued execution of its launch business. Plus, it is likely riding on the momentum of the upcoming SpaceX IPO, which is scheduled for June.

Here's why Rocket Lab stock soared in April.

Bullish updates for space

Rocket Lab has built itself into the second coming of SpaceX, albeit still years behind the leader in the field. It has a small rocket, the Electron, that delivers precise payloads into orbit. Along with the Electron, the company offers numerous programs to help build space products for commercial customers, such as satellites and communication systems. This vertical integration has enabled Rocket Lab to consistently win customer orders, along with its safe launch execution.

Last quarter, Rocket Lab's backlog grew to $1.85 billion due to increased customer demand from both commercial space players and the United States government. Wall Street was excited about this increase, leading many investment banks to raise their price targets.

Execution for its Electron business has been rock solid. The company launched two times in April and is on pace for a record level of launches this year. Along with the SpaceX IPO, Rocket Lab is getting increased investor interest in the fast-growing space economy, which has led the stock price to soar 243% in the last 12 months alone.

Image source: Getty Images.

Should you chase Rocket Lab stock?

The next step for Rocket Lab is to test and fly its larger Neutron rocket, which is currently under development. This will have significantly larger payloads than the Electron, meaning it could generate $50 million or more in revenue per launch. Rocket Lab's total revenue was $600 million in 2025. Testing of the Neutron has been delayed a few times, but the company is close to the finish line and set to do a full live test in Q4 2026.

This adds a layer of risk to any Rocket Lab investment. If the Neutron launch fails, it will mean more cash burn for the business and the potential loss of customer trust. At the same time, Rocket Lab's valuation has reached stratospheric levels. It currently has a price-to-sales ratio (P/S) of 70, which is one of the highest in the world, and will make it difficult to generate forward stock returns from here.

Avoid buying Rocket Lab stock unless it dips significantly from here.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.