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Why Rocket Lab USA Stock Soared 55.2% Higher in September

Source The Motley Fool

Shares of Rocket Lab USA (NASDAQ: RKLB) increased 55.2% higher in September, according to data provided by S&P Global Market Intelligence. During the month, it brought in an industry veteran to help it scale up its manufacturing to meet the growing demand for space launches; it also made its 11th launch of the year in September.

A busy month for the growing space company

In September, Rocket Lab USA hired Frank Klein as its new chief operations officer. Klein has worked in the automotive industry for three decades, the last 27 of which were at Daimler AG (now Mercedes-Benz Group). He has held many roles, but most recently, he was the vice president of Mercedes-Benz Vans Operations.

Rocket Lab brought on Klein to help it scale the manufacturing of its spacecraft, launch vehicles, and spacecraft components to meet growing customer demand and help Rocket Lab work through its backlog of customer orders.

The company also made its 53rd Electron launch during the month. The mission, dubbed "Kinéis Killed the RadIOT Star" by Rocket Lab, lifted off from Launch Complex 1 Pad A on Sept. 21. Kinéis is backed by private and public investors, including the French government's space agency, to improve global Internet of Things connectivity. The mission was the second of five launches Rocket Lab is doing for the French company.

An image of Rocket Lab's Electron launch vehicle.

Image source: Rocket Lab USA.

What's next for Rocket Lab

Rocket Lab's Electron is the second-most used orbital rocket in the United States, trailing SpaceX's Falcon launch vehicles. Last year, Rocket Lab made nine successful launches. Through three quarters this year, the company has made 11 launches.

The company is looking to catch up to SpaceX, but that won't happen until its Neutron launch vehicle is ready. The Electron vehicle it uses can carry just 250 kilograms of payload. The Neutron vehicle, a work in progress since 2021, can carry up to 15,000 kilograms.

The larger launch vehicle will enable Rocket Lab to take on larger payloads from civil and government customers, which should also boost its gross margin and get it closer to positive free cash flow. In August, it fired its Archimedes engine, which will be used in Neutron, for the first time. CFO Adam Spice said the company expects the first Neutron launch to be "no earlier than mid-2025."

The commercialization of its Neutron launch vehicle would be a massive catalyst for Rocket Lab. Still, further delays could impact the stock and result in lots of volatility. According to S&P Global Market Intelligence, analysts don't expect Rocket Lab to earn its first profit until 2027.

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Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool recommends Rocket Lab USA. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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