Why Rocket Lab Stock Just Jumped
Key Points
Rocket Lab (RKLB) stock jumped Friday after its 92nd successful Electron rocket launch, delivering a satellite for a Japanese Earth-imaging company.
A $397 million U.S. Space Force contract to build, launch, and operate a constellation of missile-tracking satellites.
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Rocket Lab Corporation (NASDAQ: RKLB) jumped 9.5% on Friday. The S&P 500 and the Nasdaq Composite were up 0.6% and 1.2%, respectively.
Shares of the rocket and satellite manufacturer were lifted by another successful Electron mission, a day after the company announced a new $397 million U.S. Space Force award.
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Another successful Electron launch
Rocket Lab launched an Electron rocket -- its current workhorse -- from its Complex 1 site in New Zealand at 9:18 p.m. local time Thursday, carrying a single satellite for a Japanese operator of Earth-imaging satellites. The payload was placed in orbit to join the customer's existing imaging constellation.
That was the 92nd Electron flight since the rocket debuted. Rocket Lab has another 10 dedicated missions booked for the customer before 2030.
A $397 million Space Force contract steals the show
The Electron launch was icing on the cake, however. The real story is the company's latest Space Force contract. Rocket Lab was selected for the Space-Based Airborne Moving Target Indicator (SB-AMTI) program and will build, launch, and run a constellation of flat satellites. It recieves $397 million for the project.
Image source: Getty Images.
Rocket Lab has already booked $816 million from the Space Development Agency for 18 missile-tracking satellites, plus a $266 million deal for suborbital missile-defense launches.
Is Rocket Lab stock a buy now?
Rocket Lab is moving in the right direction financially and operationally. The big question is whether it can get its Nuetron program off the ground, the company's medium lift rocket that will allow it to compete more directly with SpaceX. The newest Space Force contract is contingent on Neutron being a success.
Meanwhile, the company is still losing money, and the stock is richly valued, to put it lightly. Still, there is upside if the company can hit its targets.
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Johnny Rice 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.
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