Rocket Lab USA (NASDAQ:RKLB) has experienced a remarkable surge in its stock price, climbing approximately 600% over the past twelve months. This impressive growth is largely due to the success of its recent rocket launches and the securing of new contracts, including those for its new Neutron rocket.
While the existing Electron rocket is designed to deploy small payloads, with a capacity of up to 300 kilograms, into space, Rocket Lab’s second and more powerful vehicle, the Neutron, will significantly increase this capacity, capable of carrying up to 13,000 kilograms to low-Earth orbit.
While these advancements are promising, Rocket Lab’s stock appears expensive and unattractive at its current valuation, especially given its recent significant rally.
We’ve reached this conclusion by analyzing RKLB stock’s current valuation against its recent operating performance and its historical and present financial health. Our comprehensive analysis of Rocket Lab USA, assessing Growth, Profitability, Financial Stability, and Downturn Resilience, indicates that the company has only a moderate operating performance and financial condition.
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How Does Rocket Lab USA’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, RKLB stock looks very expensive compared to the broader market.
- Rocket Lab USA has a price-to-sales (P/S) ratio of 35.7 vs. a figure of 3.1 for the S&P 500
How Have Rocket Lab USA’s Revenues Grown Over Recent Years?
Rocket Lab USA’s Revenues have grown considerably over recent years.
- Rocket Lab USA has seen its top line grow at an average rate of 85.4% over the last 3 years (vs. increase of 5.5% for S&P 500)
- Its revenues have grown 65.0% from $282 Mil to $466 Mil in the last 12 months (vs. growth of 5.5% for S&P 500)
- Also, its quarterly revenues grew 32.1% to $123 Mil in the most recent quarter from $93 Mil a year ago (vs. 4.8% improvement for S&P 500)
How Profitable Is Rocket Lab USA?
Rocket Lab USA’s profit margins are considerably worse than most companies in the Trefis coverage universe.
Does Rocket Lab USA Look Financially Stable?
Rocket Lab USA’s balance sheet looks very strong.
- Rocket Lab USA’s Debt figure was $490 Mil at the end of the most recent quarter, while its market capitalization is $17 Bil (as of 6/23/2025). This implies a very strong Debt-to-Equity Ratio of 3.4% (vs. 19.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $428 Mil of the $1.3 Bil in Total Assets for Rocket Lab USA. This yields a very strong Cash-to-Assets Ratio of 34.1%
How Resilient Is RKLB Stock During A Downturn?
RKLB stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
- RKLB stock fell 82.8% from a high of $20.72 on 9 September 2021 to $3.56 on 27 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 21 November 2024
- Since then, the stock has increased to a high of $32.78 on 23 June 2025
Putting All The Pieces Together: What It Means For RKLB Stock
In summary, Rocket Lab USA’s performance across the parameters detailed above are as follows:
- Growth: Extremely Strong
- Profitability: Extremely Weak
- Financial Stability: Extremely Strong
- Downturn Resilience: Extremely Weak
- Overall: Neutral
Rocket Lab shows impressive sales growth and a strong financial position. It’s understandable for a company at this early stage to have negative margins and a high cash burn rate.
Despite these positives, the stock appears to have priced in all the good news, currently trading at 35 times its trailing revenues. While the upcoming Neutron rocket launch and potential new orders could certainly drive the stock higher, the current valuation presents a high risk. Additionally, there’s the broader concern of a market downturn given the uncertain macroeconomic and geopolitical climate. We’ve seen how sensitive the stock can be to such conditions, as evidenced by its over 80% drop during the 2022 inflation shock market correction.
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