Rocket Lab Has Something SpaceX Doesn't. The Case to Buy the Stock. -- Barrons.com

By Al Root

The space business is booming, and one of the best ways to play it is what some call the mini-SpaceX: space start-up Rocket Lab.

Raymond James analyst Brian Gesuale launched coverage of Rocket Lab stock with a Buy rating and $80 price target, up about 30% from recent levels, on Friday.

On Friday, shares rose 1.6% to $62.95. The S&P 500 and Dow Jones Industrial Average gained 0.9% and 1%, respectively.

Rocket Lab can launch rockets, assemble spacecraft, and is working on a larger rocket, Neutron, to boost capacity. In June, it announced plans to buy Iridium, giving Rocket Lab a satellite communications network, just like SpaceX.

"Upon closing Iridium, Rocket Lab will be the only vertically integrated space company with positive free cash flow and [a] partnership-led strategy that enables free cash flow to compound at a time when investment intensity declines," wrote Gesuale.

He projects positive free cash flow in 2028, which aligns with the Wall Street consensus. SpaceX isn't expected to have free cash flow until 2030. (It's spending a lot on AI data centers.)

"2028 provides the first clean view of the [business] model, with standalone Rocket Lab reaching about $1.8 billion revenue...and, pro forma for Iridium, [total revenue] increasing to about $2.9 billion," says Gesuale. Rocket Lab is expected to generate about $960 million in 2026 sales, up from roughly $600 million in 2025.

There is a lot of growth in space and space-based communications. It's a bold call that his peers largely agree with. Overall, 83% of analysts covering Rocket Lab stock rate shares Buy, according to FactSet. The average Buy-rating ratio for S&P 500 stocks typically ranges from 55% to 60%. The average analyst price target is about $112.

Wall Street loves the stock, but it's been dropping like, well, a satellite falling back to Earth. Coming into Friday trading, Rocket Lab stock was down 46% over the past three months. Nothing really bad happened. The company reported better-than-expected second-quarter sales in August and provided a solid outlook for the third quarter.

The problem was mainly SpaceX-or the hype surrounding it. Space-related stocks ran up into SpaceX's record-setting June IPO only to sell off after. Shares of Rocket Lab, which, like SpaceX, offers launch and satellite services, albeit at a smaller scale, traded north of $150 in late May. Shares closed below $59 in late July, a few weeks after the IPO, as SpaceX stock fell below its $135 IPO price.

SpaceX is important for the sector. It essentially created the modern space economy with its pioneering use of reusable rockets. And SpaceX's trillion-dollar valuation signals a major opportunity in space, on which other companies, including Rocket Lab, can capitalize.

Write to Al Root at allen.root@barrons.com.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

September 11, 2026 16:17 ET (20:17 GMT)