Why Rocket Lab Stock Dropped Then Popped Today

Rocket Lab (NASDAQ: RKLB) stock got thrown for a loop Friday morning, first crashing more than 18% in response to a disappointing earnings report, then recovering as investors took time to digest the news. As of 11:30 a.m. ET, Rocket Lab is up 2%.

Analysts had forecast the small rocket company would lose $0.07 per share in the fourth quarter of 2024, on sales of $130.6 million. In fact, revenue exceeded targets at $132.4 million, but the loss was bigger than expected: $0.10 per share.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Rocket Lab by the numbers

"2024 was a record-setting year for Rocket Lab," said CEO Peter Beck, "with our highest annual revenue ever posted of $436.2 million and a record Q4 2024 revenue of $132.4 million -- a 382% increase compared to Q4 2021."

Rocket Lab launched 16 times in 2024, its highest-ever launch cadence. Still, net losses increased about 4% both for Q4 and for the full year, and Rocket Lab's per-share loss held steady at $0.10 for the quarter, and $0.38 for the year, showing no improvement in profitability despite significant gains in revenue.

Investors apparently were initially upset with guidance, with Rocket Lab predicting Q1 revenue of about $120 million (versus the $135.7 million estimate that Wall Street anticipated), a loss on earnings before interest, taxes, depreciation, and amortization (EBITDA), and giving no guidance for earnings as calculated according to generally accepted accounting principles (GAAP).

Rocket Lab: Beyond the numbers

Management had a few other significant announcements that may have tempered investors' discontent. The company has signed a new eight-launch deal with Japan's iQPS satellite company. Rocket Lab also announced two new products:

• Flatellite is a new mass-produceable and easily stackable (for launch) satellite "tailored for large constellations."
• Return on Investment is a new ocean-going landing barge that Rocket Lab says it will use for landing first-stage Neutron rockets, once those begin launching, and returning them to base for reuse.

Now, Rocket Lab just needs to make money and investors would be happier.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $311,551!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,990!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $519,375!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of February 28, 2025

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