Why Is Rocket Lab USA Stock Shooting Higher Monday?

Rocket Lab USA, Inc RKLB stock jumped after Citigroup analyst Jason Gursky reinstated the stock with a Buy rating and a $6 price target. The stock climbed over 9% on Monday.

The re-rating followed recent capital markets transactions and a significant award by the U.S. government. 

The analyst noted that the former provides the company with sufficient liquidity to execute its current backlog, develop new products, and engage in bolt-on M&A. 

Also Read: Rocket Lab Has A Proven Business Model and Viable Profitability Path In 1-3 Years: Keybanc Analyst

The latter proves that customer adoption of the company’s products is accelerating. 

The analyst derived the price target of $6 using a recent transaction multiple of 3.6x set against his 2026 revenue estimate.

Earlier in February, the company announced an upsized private offering of $300 million aggregate principal amount of 4.250% convertible senior notes due 2029. 

Rocket Lab is due to report fourth-quarter financial results on February 27. It expects fourth-quarter revenues of $59 million – $61 million versus consensus of $65.97 million.

In January, the company initiated its first Electron mission of 2024, targeting space debris for Spire Global, Inc SPIR and NorthStar Earth & Space. 

As part of Rocket Lab’s strategy to make Electron a reusable rocket, the mission successfully recovered the rocket’s first stage post-launch.

Rocket Labs Stock Prediction For 2024

Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock.

Shares of Rocket Lab USA have an average 1-year price target of $6.67, representing an expected upside of 43.1%.

Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. No analysts have bearish recommendations on Rocket Lab USA, while 3 analysts have bullish ratings. The street high price target from Keybanc is $8.0, while the street low from Citigroup is $6.0.

Price Action: RKLB shares are trading higher by 6.88% to $4.63 on the last check Monday.

Photo courtesy of Rocket Lab