Rocket Lab’s Surprise Stock Move After Solid Earnings

Rocket Lab launched its Electron rocket five times in the second quarter. Electron launched 10 times in the first half of 2025. (Courtesy of Rocket Lab)

Space launch and technology provider Rocket Lab USA reported better-than-expected quarterly sales and a smaller-than-expected quarterly loss. The surprise is how investors took the report.

Rocket Lab announced a second-quarter operating loss of $33.6 million from sales of $144.5 million Thursday evening. Sales topped the high end of Rocket Lab’s $130 million to $140 million guidance range. Wall Street was looking for a $37.5 million loss from sales of $135.4 million, according to FactSet.

Backlog ended the quarter at $1 billion, similar to the end of the first quarter. For the coming quarter, Rocket Lab expects sales of $140 million to $150 million, up from $104.8 million reported in the third quarter of 2024.

The biggest surprise of the quarter just might be the stock move.

The stock added 1.1%, closing at $44.69, while the S&P 500 and Dow Jones Industrial Average added 0.8% and 0.5%, respectively.

Rocket Lab stock has moved an average of 14%, up or down, over the past four quarters, including a 28% gain after third-quarter 2024 results and an 11% drop after first-quarter 2025 results. Options markets implied shares would move about 10% up or down following the second-quarter numbers. Shares haven’t moved that much yet.

That doesn’t mean investors aren’t happy with progress. Coming into Friday trading, Rocket Lab stock was up about 74% this year and about 827% over the past 12 months.

Cantor Fitzgerald analyst Andres Sheppard remains bullish on the stock, pointing out in a Thursday report that two coming catalysts can drive shares higher. First, the company is on track to launch its larger Neutron rocket in the second half of 2025. Second, a Space Development Agency (SDA) Tranche 3 business award.

The SDA is a Defense Department program to develop space-based defense capabilities. Rocket Lab has won SDA business in the past.

As for Neutron, it can deliver about eight metric tons into low-Earth orbit. The company’s current launch vehicle, Electron, can carry about 300 kilograms into space. Bigger rockets will mean more business for the company.

Sheppard rates shares Buy and has a $54 price target for shares. Overall, 69% of analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Rocket Lab stock is about $44 a share.

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