Why Rocket Lab Stock Is Up 18% Today

The rocket lab (RKLB 16.29%) investors are having a fantastic week. Fresh off another successful space launch (this one for Capella Space) and a strong earnings report that showed sales up 71% year-over-year, the tiny rocket company announced this morning that it just shipped a pair of ESCAPADE spacecraft at Cape Canaveral for launch. to Mars.

The result: Rocket Lab stock was up 18% by 1:45 pm ET.

Next stop: Mars

Rocket Lab built the Blue and Gold ESCAPADE (short for “Escape and Plasma Acceleration and Dynamics Explorers”) spacecraft for the University of California Berkeley Space Science Laboratory and NASA. Their mission will be to travel to Mars atop a Blue Origin rocket to conduct heliophysical research on the plasma and magnetic fields around the Red Planet.

More importantly for investors, Rocket Lab will also try to prove it can do space science missions for NASA at about one-tenth the cost of larger space companies such as Boeing, Lockheed Martinand Northrop Grumman. To test this theory, NASA estimated that they would probably charge about $550 million for this mission.

Rocket Lab’s budget was therefore capped at $55 million.

Is Rocket Lab stock a buy?

That’s a lot of money for a small company like Rocket Lab, equivalent to more than 22% of all the company’s revenue last year. Crunching the numbers this week, TechCrunch noted that while Rocket Lab’s price was not disclosed, it likely has to share some of the $55 million with other NASA mission participants.

But it doesn’t matter. As much as Rocket Lab does this mission, if it’s a success and proves to NASA that Rocket Lab can stick to a budget and beat its competitors’ prices, it’s likely to win Rocket Lab even more business in the future.

As Rocket Lab continues to move toward profitability (S&P Global Market Intelligence predicts a first profit in 2027) and the company continues to win high-profile contracts, Rocket Lab stock is looking more and more like a buy.