Why Rocket Lab stock fell on good news today

The rocket lab (RKLB -2.79%) continue to register contracts. Yesterday, the company announced that NASA has hired it to propose a solution to the space agency’s troubled Mars Sample Return (MSR) project — ideally one that will cost less than $11 billion and take less than 16 years to complete.

That’s the good news. The bad news came a few hours later: Rocket Lab had just announced that it would report Q3 financial results on Nov. 12, and its stock was down 2.9% by 3:25 p.m. ET.

Good news first

Let’s start with the good news. For the past three years, NASA’s Perseverance rover has been collecting soil and air samples on Mars for retrieval by a robotic spacecraft. However, NASA suspended work on the MSR in April after studies suggested the project could cost between $8 billion and $11 billion and could not be completed before 2040.

Rocket Lab believes it can accomplish the mission both cheaper and sooner. NASA therefore awarded him a contract (of unspecified value) to develop and propose a “streamlined, end-to-end mission concept that would be delivered for a fraction of the current cost of the program designed and completed several years from now earlier than the current one. estimated date of sample return in 2040.”

Is Rocket Lab stock a buy?

While it’s nice to win a contract, the lack of one price from the contract suggests this may not be a big problem for investors. (Though if Rocket Lab ends up collecting $7.99 billion and winning the job, that would obviously be a different horse).

Meanwhile, investors must assume that the value of a contract just to study the issue is not material. They also have to assume they won’t change analysts’ forecasts that see Rocket Lab’s per-share loss rise more than 37% (to $0.11 per share) in Q3 despite a 51% rise in revenue to 102 .3 million USD.

Rocket Lab may be successful as a rocket company, but to be a great investment, it needs to eventually make a profit. That probably won’t happen in November.