Rocket Lab Stock Falls on Good News. What Gives?

There And Back Again going “there” (Courtesy Rocket Lab Corp)

Rocket Lab announced the launch window for the 70th mission of its rocket Electron, so why are shares falling?

Monday, the space technology company said its “Live, Laugh, Launch” mission would take off from the company’s facility in New Zealand no earlier than Aug. 23. The mission will deploy five satellites for a “confidential customer.”

The launch is a normal course of business and good news. Still, the stock fell 9%, closing at $40.92, while the S&P 500 fell 0.6% and the Dow Jones Industrial Average finished flat.

One reason for the decline is profit-taking, not the mission. Coming into Tuesday trading, Rocket Lab stock was up about 77% year to date.

Shares of Firefly Aerospace , which started trading Aug. 7, were also off 6.5% on Tuesday, closing at $45.48. The company priced its initial public offering at $45 a share and closed above $60 in its first trading day; it has since given back those gains.

Rocket Lab shares also got a recent boost from an executive order signed by President Donald Trump on Aug. 13 designed to speed up launch and reentry approvals.

More launches at a faster rate mean more sales for Rocket Lab. (Companies pay Rocket Lab to carry things into space.) “This executive order will directly benefit commercial space companies like Rocket Lab and [Firefly competitor] Intuitive Machines by reducing regulatory delays and lowering compliance burdens for launches, reentries, and other commercial space activity,” wrote Cantor Fitzgerald analyst Andres Sheppard on Monday.

He rates Rocket Lab stock Buy and has a $54 price target. Sheppard is looking forward to the deployment later this year of the Neutron rocket, which has many times the cargo-carrying capacity of the Electron.

“Recall, management has previously disclosed that the company is targeting 9 Neutron Launches through 2027: one launch in 2025 (no revenues expected), three launches in 2026, and five launches in 2027,” added Sheppard. A faster pace of launches would represent faster sales growth for the company.

Overall, Wall Street is optimistic about the outlook for Rocket Lab, with 69% of analysts covering the company rating 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 is about $46 a share.

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